Supporters of a semi-nomadic people from the cloud forests of northeast Colombia urged Occidental Petroleum Corp. shareholders Friday to sell their stock to protest an oil-drilling project the tribe contends is on its sacred ancestral lands.
The normally genteel Oxy annual meeting always begins with the Pledge of Allegiance and ends with a catered lunch, but this year shareholders also were greeted by a crowd of more than 100 chanting, drumbeating, sign-waving activists.
For four years now, an ever-larger group of protesters has haunted Oxy’s annual showcase in Santa Monica trying to derail the Westwood-based oil company’s potentially lucrative deal to drill for petroleum in an area claimed by the U’wa. This 5,000-member Indian tribe has threatened to commit mass suicide if oil is extracted from its ancestral homeland, although Oxy and the Colombian government say the test-well site is in a developed area outside the U’wa reservation.
The activists, who also hold Oxy stock, were urging passage of a non-management resolution directing Oxy to hire an independent business analysis firm to study the risk to the oil company’s long-term profitability and to its stock price from the oil project and the suicide threat. The resolution received 4% of the shares voted at the meeting.
Colombia is already a key production area for Oxy, and the proposed project is extremely promising, Chairman and Chief Executive Ray R. Irani told shareholders.
However, the company is merely a contractor for the Colombian government, he said, and the dispute over the test well must be settled by Colombians. Irani said Oxy has been a good corporate citizen during more than 40 years of oil exploration in Colombia.
The U’wa cause has gained momentum in recent weeks after the reported death of three U’wa children when the Colombian military routed a blockade of a road leading to the test-well site. Colombian police say that no deaths occurred.
Then, a Colombian court blocked the project--described by state oil officials as their country’s most important oil prospect--ruling that the U’wa should have been consulted and that the tribe’s rights were violated. A decision on the government’s appeal is expected next month.
Demonstrations have escalated at offices of Fidelity Investments, a large Oxy shareholder, and in Irani’s Bel-Air neighborhood.
Irani, a multimillionaire, recently sued several U.S. human rights and environmental rights activist groups for harassment over their involvement in the demonstrations and won a temporary restraining order to keep the protesters out of his driveway.
Irani delivered an upbeat message to shareholders, predicting swelling earnings this year because of higher oil prices, cost cutting and an improved asset mix.
“The actions we have taken over the last two years have made Occidental stronger than ever, and Oxy’s prospects for the future have never been better,” Irani said.
He noted that the company earned more in its first quarter, when it reported net income before special items of $264 million, than it earned during all of 1999. Oil and gas production will rise 13% to 480,000 barrels a day in 2000, he said.
But Irani became increasingly irritable as activists heckled executive presentations and asked argumentative questions. At one point, he interrupted a lengthy statement by U’wa President Roberto Perez as he mentioned the deaths of the U’wa children, asking: “How much longer do you have?”
Despite the defeat Friday, the activists and the U’wa vowed to press their case with U.S. investors.
Occidental Petroleum’s shares fell 50 cents to close at $21.44 on the New York Stock Exchange.