Chevron CEO tells critics they are wrong

ORIGINAL: Fuel Fix

by David R. Baker

May 30, 2012

San Ramon — Chevron Corp. CEO John Watson faced some of his company’s sharpest critics Wednesday during the oil giant’s annual shareholders meeting and politely told them they were wrong.

Wrong about Chevron’s record on environmental protection. Wrong about the company’s impact on the countries where it pumps oil.

And wrong about a high-profile pollution lawsuit in Ecuador that led to an $18 billion judgment against Chevron, a verdict the company continues to fight.

“Whatever we do, we’ll do safely or not at all,” Watson told Chevron executives, investors and critics packed into a conference room at the company’s San Ramon headquarters.

Activists who had come from around the world to confront Watson, however, weren’t giving ground.

One castigated Chevron for an explosion in January at a natural gas platform off the coast of Nigeria, a blast that killed two people. Another critic, from Angola, complained about frequent, fish-killing oil spills.

And in perhaps the most heated exchange, one of the Ecuadorans suing Chevron pressed Watson to accept responsibility for oil-field contamination in her country.

“I have come to say that Chevron needs to put on its pants and act like men and own up to the damage you have caused,” said Luz Trinidad Andrea Cusangua, speaking in Spanish with a translator at her side.

Chevron considers the Ecuadoran lawsuit a shakedown and has filed a racketeering case against the lawyers pursuing it. Facing Cusangua across the crowded room, Watson said the attorneys had misled her.

“I understand you’ve been lead to believe by plaintiffs’ lawyers and others that Chevron is responsible,” he said, with his own translator repeating his comments. “What’s been made clear by the mountain of evidence we’ve produced over the last several years is that Chevron is not responsible.”

Chevron shareholder meetings, sometimes held in San Ramon and sometimes in Houston, have for years attracted critics. Wednesday’s meeting brought an estimated 150 protesters to the company’s gate, while some of their colleagues who own shares in Chevron ventured inside to address the meeting. Security was tight both inside and outside the conference room, with investors passing through several checkpoints to enter.

Watson’s predecessor, David O’Reilly, sometimes turned combative during the annual meetings, especially when pressed on Ecuador. In contrast, Watson, who took Chevron’s helm in 2009, favors a more soft-spoken approach. On Wednesday, he frequently told critics that he agreed with them — to a point.

Despite the difference in style, Watson is no less adamant than O’Reilly about defending the company’s policies and operations. He expressed regret for the Nigeria explosion, for example, but told shareholders that the blast had not damaged the environment. He denied that Chevron suffered frequent spills in Angola.

He also said the company took responsibility for an oil spill off the Brazilian coast in November. But he defended Chevron’s handling of the incident, which has triggered fines and a criminal investigation in Brazil.

“We feel very good about our initial response to that,” he said. “We acted in textbook fashion to stop the spill in four days.”

A representative of Brazil’s United Federation of Oil Workers – a union that is trying to have Chevron barred from working in Brazil as a result of the spill — was denied entry to the shareholders meeting Wednesday. Watson said the representative, João Antonio de Moraes, lacked proper documentation to enter.

While many speakers at the meeting addressed Chevron’s operations in other countries, some focused on domestic issues, particularly fracking.

The practice, properly known as hydraulic fracturing, has led to a boom in natural gas production within the United States but also has prompted fears that it could contaminate water supplies. A shareholder proposal, voted on Wednesday, would have required Chevron management to report on the financial risks posed by proposed fracking regulations and moratoria in some communities.

But Watson argued that environmental concerns about fracturing can be addressed, a point he repeated after the meeting, in a brief conference with reporters.

“It’s a once-in-a-generation benefit for the country, and we should take advantage of that, with the proper precautions,” he said.

About 73 percent of Chevron shareholders voting Wednesday rejected the fracturing proposal, according to the company’s preliminary count. Shareholders also rejected proposals to place on Chevron’s board an independent director with environmental expertise and split the jobs of board chairman and CEO.