By Maha El Dahan
ABU DHABI (Reuters) -U.S. energy giant ExxonMobil will not be able to continue doing business in the European Union if the bloc does not significantly loosen a sustainability law that would penalise companies with fines of 5% of global revenue, Chief Executive Darren Woods said on Monday.
Woods joins a growing chorus of outraged energy producers who are urging European lawmakers to make significant changes to the law, which requires companies doing business in the EU to find and fix human rights and environmental issues in their supply chains.
“If we can’t be a successful company in Europe, and more importantly, if they start to try to take their harmful legislation and enforce that all around the world where we do business, it becomes impossible to stay there,” Woods told Reuters on the sidelines of the ADIPEC meeting in Abu Dhabi.
The EU’s Corporate Sustainability Due Diligence Directive was meant to give investors more visibility on the risks throughout the value chain and make non-compliant companies accountable to member states and to victims of human rights or environmental harm, even in their operations outside Europe.
OVERREGULATED ECONOMY
“We’re continuing to advocate to make sure that people really understand the disastrous consequences of this legislation, if it stands as it currently is, and we’re going to continue to try to rally basically, business leaders around the world to push back against this legislation,” Woods said.
He added that although European lawmakers are listening to the opposition from energy producers, it has not led to any serious changes.
“If anything, it’s muddling the language up, and in my mind, opening up the exposure even greater, because you’ve increased the room for interpretation,” he said.
The European Parliament agreed to negotiate further changes to the law last month and the EU aims to approve the final changes by year-end.
“Today, it’s already an overregulated economy, is de-industrialising, suffocating economic growth. This is just going to put a further gag on that growth,” Woods said.
QATARI OBJECTIONS
Major gas producer Qatar and the United States, last month, urged European heads of state to reconsider the law, which they said threatens Europe’s supply of reliable, affordable energy.
Qatar has threatened to halt supplying Europe with liquefied natural gas (LNG) and said it will not be able to continue doing business in the EU if further changes are not made to its corporate sustainability rules. Qatar supplies between 12% and 14% of Europe’s LNG since Russia’s 2022 invasion of Ukraine.
But companies, including ExxonMobil, have demanded the EU go further and fully withdraw the policy, arguing it would lead to businesses leaving Europe.
NEGOTIATING DETAILS OF IRAQ RETURN
ExxonMobil signed an agreement last month to help Iraq develop its giant Majnoon oilfield and expand oil exports, signalling the energy major’s return to the country after two years.
“We’ve got a long way to go to negotiate the final parameters associated with that development,” Woods said, especially over how Exxon would be paid.
The company expects to finalise a profit-sharing arrangement, which Woods said is in line with industry practice.
(Reporting by Maha El Dahan; Writing by Andrew Mills; Editing by Tom Hogue)
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