ExxonMobil Corp. on Wednesday issued its first report outlining how it assesses and manages risks associated with developing unconventional resources, including through hydraulic fracturing (fracking). Baker Hughes Inc. also has adopted its policy to disclose drilling risks.
ExxonMobil's decision to issue its report is part of an ongoing dialogue with shareholders. For the past several years, a minority of investors has urged the oil major to reveal how unconventional drilling impacts its earnings. Despite being turned back every year by the majority, the board in April agreed to disclose the drilling risks (see Daily GPI, April 4).
"Hydraulic fracturing has been responsibly and safely used by the oil and gas industry for more than 60 years, but the process isn't without risks," said Investor Relations chief Jeffrey Woodbury. "This report to shareholders details how ExxonMobil uses sound risk management processes and engages with stakeholders to ensure safe and environmentally responsible operations."
The shift by ExxonMobil was considered unique in that the company agreed to comply with the minority of its shareholders, which for the past four years had asked for the information through proxy votes at the annual meeting. None of the votes ever had garnered more than half of the shareholders' support; last year the resolution was approved by only 30%.
Unconventional natural gas and oil development in the United States has resulted in widespread benefits, including significant job creation, reduced carbon dioxide emissions, lower energy costs, new sources of government revenue and improved energy security, ExxonMobil noted. The company's report highlights numerous studies that support these trends.
"The report presents information on how the application of sound risk management practices that protect human health and the environment can be deployed to continue supporting the significant benefits of resource development," the Irving, TX operator said.
Baker also quietly has formally launched its drilling disclosure policy that it unveiled in April (see Shale Daily, April 25).
"Introducing greater transparency about the chemicals used in the hydraulic fracturing process and protecting the ability to innovate are not conflicting goals," Chief Strategy Officer Derek Mathieson said. "The policy we are implementing...is consistent with our belief that we are partners in solving industry challenges, and that we have a responsibility to provide the public with the information they want and deserve. It simultaneously enables us to protect proprietary information that is critical to our growth."
For each fracking job that Baker performs going forward, the company policy mandates that it will disclose a single list of all of the chemical constituents of its products used and specify their maximum concentrations.
In April Baker said the disclosure plan would be made possible "without compromising our formations -- a balance that increases public trust while encouraging commercial innovation." It is not to be a blanket plan because the disclosures are to be made "where accepted by our customers and relevant governmental authorities."
Baker, the third-largest global services provider after Schlumberger Ltd. and Halliburton Co., said it supported customers in communicating chemical information used in drilling in the most expedient way by endorsing FracFocus.org, the national chemical registry managed by the Groundwater Protection Council and the Interstate Oil and Gas Compact Commission.