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Investors ask oil majors for offshore drilling safety plans

By Scott Malone

BOSTON (Reuters) - A group of investors including the two largest U.S. public pension funds asked 27 top oil and gas companies on Thursday to disclose what they have done to make their offshore drilling safer in the wake of the BP <BP.L><BP.N> oil spill.

Members of the Ceres coalition of socially-concerned investors, who manage some $2.5 trillion in assets, called on companies including Exxon Mobil Corp <XOM.N> and Chevron Corp <CVX.N> to say what steps they are taking to make sure their offshore operations are not vulnerable to the sort of failure that caused the April 20 blowout, which triggered the world's worst accidental marine spill.

"The shareholder harm that has flowed from the BP spill has focused investor attention on governance, compliance and management systems needed to minimize risks associated with deep water offshore oil and gas development worldwide," the investors, who included top financial officials of California and New York State wrote.

BP's market value has fallen more than a third since the blast on the Deepwater Horizon rig in the Gulf of Mexico that set off the disaster, and the company is in the process of selling some $30 billion in assets to cover the cost of the cleanup.

"Investors have a right to full disclosure of the risks associated with oil companies' offshore operations," said Bill Lockyer, California's treasurer and a trustee of pension funds Calpers and Calstrs, which saw the value of their BP shares fall $349 million after the spill.

The letter, also sent to Royal Dutch Shell Plc <RDSa.L> and Petrobras <PETR4.SA>, asks the companies to disclose how much they have invested in developing safer drilling techniques and how the companies evaluate the safety standards of the contractors they hire to run drilling operations.

A group sent a separate letter to 26 global insurance companies including American International Group <AIG.N>, Lloyd's of London <LOL.UL> and Swiss Re <RUKN.VX>, asking if they planned to limit their future exposure to offshore drilling operations.

BP on Wednesday said it had stemmed the flow of crude from the well by pumping in heavy drilling mud, some 107 days after the leak. That news followed several less successful attempts to cap or plug the well.

"Would I invest in an offshore drilling company if its disclosure statement revealed that its 'rapid response' to a catastrophic oil spill involved the unproven technique of stuffing golf balls, hair clippings and shredded tires down a well? Probably not," said Pennsylvania State Treasurer Rob McCord, who also signed the letter.

(Reporting by Scott Malone, editing by Dave Zimmerman)

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