Cairn Energy: exploring for oil in Greenland’s Arctic

HM Treasury has a responsibility to ensure that RBS reduce their footprint.

RBS arranged the finance allowing the Scottish oil company Cairn Energy to forge ahead with oil exploration in pristine parts of Greenland’s Arctic. In March 2009, following the Treasury’s bail out of the bank with public money, RBS acted as joint arranger with Merrill Lynch, placing shares worth £116 million for “accelerated drilling” in Greenland by Cairn Energy.

Determined to tap into potential oil reserves within this untouched region, Cairn Energy are one of the companies leading the rush into Arctic drilling. The US Geological Survey has estimated that over 16 billion barrels of oil and gas could lie off Greenland’s coast. Taking this out of the ground would be an absolute disaster for global efforts to tackle climate change.

Tullow Oil: fuelling conflict in Uganda and DRC

Displaying RBS-NatWest’s true colours

In March 2009, RBS was part of a consortium of 14 banks that lent $1,890 million to the Irish company Tullow Oil - providing in the region of $100 million itself. In January 2009, RBS placed shares for Tullow Oil and helped raised £402 million.

Tullow Oil explores for and drills oil in highly unstable parts of Central Africa and South Asia, fuelling conflict. It has recently been expanding its operations along the border between Uganda and the Democratic Republic of Congo (DRC). In early 2009, Tullow Oil announced the discovery of 400-1000 million barrels of oil by Lake Albert in Uganda, on the border with the DRC. Tullow also holds oil exploration rights across the border in North Kivu in the DRC, which continues to be torn by strife after more than a decade of resource-driven civil war. The region holds 1.4 million internally displaced people, whilst it is the boarder area which has witnessed some of the fiercest fighting between rival armies and militias.

An additional 30,000 refugees were displaced in North Kivu during two weeks of fighting in March, just as RBS provided funds for further drilling.

Turkish protestors angry over diruption of fishing grounds

Image © Mika Minio-Paluello

Baku-Tbilisi-Ceyhan Pipeline

The Royal Bank of Scotland (RBS), in 2004, was one of six banks which agreed a $1.6 billion loan for BP’s controversial Baku-Tbilisi-Ceyhan (BTC) pipeline project. The pipeline stretches 1,776km from the Azerbaijani town of Baku on the Caspian Sea to the Turkish port of Ceyhan on the Mediterranean, the second longest oil pipeline in the world. Able to carry one million barrels a day, oil produced will be responsible for 160 million tonnes of carbon emissions a year, equivalent to 28% of the UK’s annual emissions.

Ariel shot of a tar sands oil production plant

Long Lake Tar Sands, Alberta

In 2004 and 2006, RBS-NatWest acted as the lead arranger of a US$800 million loan to Canadian oil company Opti Canada for their Long Lake tar sands project south of Fort McMurray in the Athabasca region of Alberta in Canada. Tar sands is a type of extremely heavy crude oil mixed with clay and sand. It requires significantly more energy to refine into a useable form, the process emits 80kg of greenhouse gasses per barrel. The Long Lake project financed by RBS currently produces 240 barrels per day but there are plans to increase this to 240,000 over the next 10 years.