A well-oiled protest against Oxy
It’s a time-honored ritual for Occidental Petroleum Corp.: the yearly gathering of shareholders and protesters.
The setting Friday was a sea-view hotel in Santa Monica where shareholders, eager to hear how record energy prices made this year the Westwood-based company’s most successful, strolled past hazmat-suited protesters complaining about Occidental’s environmental record in Peru.
Inside, Chief Executive Ray R. Irani was upbeat talking about the highest profit in the oil and gas company’s history -- $5.4 billion for 2007, with shrinking debt and a record $63.6 billion market capitalization.
“Our long-term business strategy of focusing on high-potential assets in our core regions and maintaining strict financial discipline is paying off and creating outstanding shareholder value,” he said.
But Irani’s tone turned stormy when confronted by leaders of the Achuar tribe and supporters like actress Daryl Hannah. They dominated the question and comment period, accusing Occidental of causing and then refusing to clean up dangerous levels of pollution in the Peruvian Amazon.
“I’ve been very tolerant on this issue, but we can’t keep listening to every guy who came up from Peru,” Irani said in exasperation at one point.
For most of the meeting, Irani had only good news for his audience: net income of $1.85 billion for the first quarter of 2008 compared with $1.21 billion in the year-earlier period; an increase in the annual dividend to $1.28 a share from $1 a share. He mentioned the highest-ever year-end stock price of $76.99 and a nearly 500% increase in stockholder return to 60% in 2007 from 2002.
Occidental expects ongoing benefits from partnerships in the Middle East and has invested nearly $750 million in properties in California, West Texas and elsewhere in the U.S., Irani said.
Irani paused several times, prompting polite applause from the shareholders. But the protesters, some in traditional garb and speaking in Spanish or their native language, earned more spontaneous approval from those gathered at the Fairmont Miramar Hotel.
“We demand compensation -- our people are suffering,” Henderson Rengifo told Irani through a translator. “We will never remain quiet while your company evades its shameful responsibility.”
Occidental sold its Peruvian holdings to Argentine corporation Pluspetrol in 2000 and withdrew after drilling for oil in the Corrientes River region for more than 30 years. Occidental has said that Pluspetrol assumed all obligations with its purchase.
Protesters said they may appeal a recent decision by a federal judge to transfer a class-action suit against Occidental to Peru.
Skyrocketing energy prices were also an issue. To one question about high demand and low supplies, Irani answered that oil and natural gas production increased 4.6% in 2007 compared with 2006 and was expected to jump 10% this year. Occidental owns no oil refineries or service stations.
Shareholders rejected two proposals on executive compensation. One would have given shareholders an advisory vote on executives’ salaries and the other asked that pay be dependent on the quality of executives’ performance.
Irani made $77.6 million in 2007, up 40% from the $55.5 million he earned in 2006.
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