Bosses at the world’s big five oil companies have been showered with bonus payouts linked to a $1tn (£650bn) crescendo of spending on fossil fuel exploration and extraction over nine years, according to Guardian analysis of company reports.
The unprecedented push to bring untapped reserves into production,
and to exploit new and undiscovered fields, involves some of the most
complex feats of engineering ever attempted. It also reflects how
confident Exxon Mobil, Shell, Chevron, Total and BP are that demand will remain high for decades to come.
The big oil groups are pressing ahead with investments despite the International Energy Agency (IEA) estimating that two-thirds of proven fossil fuel reserves will need to remain in the ground to
prevent the earth from warming 2C above pre-industrial levels – a
proposed temperature limit beyond which scientists warn of spiralling
and irreversible climate change.
Multi-billion-dollar capital projects amount to huge, long-term bets
by the big five that exorbitant costs associated with unlocking
hydrocarbon reserves in some of the most inaccessible locations on the
planet can eventually be recouped and converted into profits.
Bonuses for chief executives at all five firms are tied to the
achievement of delivery milestones in the construction and deployment of
Shell’s Ben van Beurden,
for example, last year received a pay deal worth $32.2m, including
bonuses linked to delivering “a high proportion of flagship projects on
time and on budget”. These are thought to include four platforms
floating 1,000 metres or more above deepwater wells in the Gulf of Mexico, Gulf of Guinea and South China Sea.
Similarly, BP’s Bob Dudley was awarded a pay deal worth $15.3m, with bonuses linked to seven “major projects”, thought to include Sunrise, a tar sands joint venture in Canada, as well as projects in Angola, Azerbaijan, the Gulf of Mexico and the North Sea.
The boss of Exxon, Rex Tillerson,
was paid $33.1m last year including bonus payouts linked to projects
including the first well in the Kara Sea, in the Russian Arctic, and the
expansion of the Kearl tar sands operations in northern Alberta,
The Guardian asked each of the big five about the appropriateness of
linking bonuses to capital spending given the looming threat posed by
climate change. Shell said pay for Van Beurden “reflects delivery of
company strategy, measured by both short-term and long-term targets”.
executive rewards were “strongly tied to corporate performance and
directly linked to increases in shareholder value”. Exxon Mobil and BP
declined to respond, while Total did not answer.
for more detailed information go here