By Trevor Sharman, AGM activist
I attended the Annual General Meeting (AGM) of Nostrum Oil & Gas (NOG), which was hosted in an international law firm in the belly of the City beast – all atriums and glass elevators – thousands of miles away from the company’s primary operation hub in Kazakhstan.
Six out of nine of NOG’s board members were present and accountable to 11 attendees who included myself and several company advisors and staff members. I was surprised that the CEO and two directors had not turned up. However, we were reassured that there were enough shareholders present – at least two – for the meeting to go ahead (there are rules for this sort of thing!), although my guess was they were sitting behind the desk!
I asked the only question. The response to which was something of a broken record. ‘We are an oil and gas company, and as such that is what we do and do to our utmost’
The formal business was the usual schedule of re-appointments, amendments and agreements for the board to override shareholders, ‘should it be necessary’. The voting process was like a politician’s dream with majorities of up to 99.94% in favour of re-appointing one director.
I asked the only question. The response to which was something of a broken record. ‘We are an oil and gas company, and as such that is what we do and do to our utmost’. The Chairman briefly outlined key issues including the company having managed the oil price fluctuations positively, invested in new production wells and their own pipelines, although he skated over the fact that profits were significantly down over the past three years and no dividend would be paid. Not a murmur of dissent to this!
After the formal meeting the Chair, Atul Gupta, came to speak with me. He was very charming and ‘recognised’ that I had asked a valid question, but stated that while there is a market for oil and gas, NOG would meet it. He accepted that there might be international action to limit the hydrocarbon industry, but until then, he would only respect the market and saw little immediate need to consider changing company strategy.
This AGM strengthened my view that it is only intervention in the market by international bodies and governments that will begin to reduce the damage inflicted by the oil and gas industry. This company seems impressively and efficiently run by industry standards and appears to have competent leadership. They are a FTSE 250 company, yet they also appeared to be entirely trapped by the dynamics of the market to the extent that they would not entertain the possibility of change until and unless they were forced to do so.
This AGM strengthened my view that it is only intervention in the market by international bodies and governments that will begin to reduce the damage inflicted by the oil and gas industry
As I left I was approached by Kirsty Hamilton-Smith, Group Head of Investor Relations, who gave me her card, no doubt concerned that a significant investor was less than impressed with her company. Little did she know that I was there on ShareAction’s one and only share!
Thanks Trevor! To find out more about our campaign on engaging high-carbon companies on transition to 2 degrees, click here