Sunday, June 6, 2010

William Reilly Takes Temporary Leave from ConocoPhillips Board

William Reilly said he disclosed his conflict of interest to President Obama, when the President asked him to co-chair the BP Oil Catastrophe Commission.

Reilly sits on the ConocoPhillips Board. He was paid roughly $250,000 in compensation in 2009 and controls over $2 million in ConocoPhillips stock. ConocoPhillips is a joint venture partner with BP in the massive Tiber field in the Gulf of Mexico.

Rachel Maddow's blog picked up PEU Report's research June 1. She pressed the issue directly with William Reilly on June 4. He stated:

"The president considered it an advantage that I do know the industry and have experience with it."

Odd, President Obama never cited Mr. Reilly's insider industry experience or connections, focusing solely on his EPA and World Wildlife Fund credentials.

As a result of Rachel Maddow's pressing, Mr. Reilly will take a temporary leave from ConocoPhillips board. That might mean less 2010 compensation from ConocoPhillips, however the board could choose to pay Reilly what he would've earned had he not been on Obama's Commission. The Commission report is due by the end of the year.

Consider what Board member Reilly heard at ConocoPhillips annual shareholders' meeting on May 12:

For our company, ConocoPhillips, we don't have a real large presence in the offshore Gulf of Mexico. We get about 1% of our production from offshore in the Gulf of Mexico and most of our emphasis is shown in this dotted oval area and that's where we either have some production or we have exploration effort. Now we've made some good exploration successes here in the past year and we'd like to do appraisal drilling, but we recognize that given the situation and the significance of this incident it is more than likely going to lead to more regulations, rules and deferrals or delays with respect to our effort on exploration and appraising these exploration successes.
ConocoPhillips added to their Gulf of Mexico portfolio in January 2010. Their press release states:

ConocoPhillips will acquire 50 percent working interest in 16 Statoil-operated Gulf of Mexico (GOM) leases and acquire all of Statoil’s 25 percent working interest in five additional GOM leases operated by ConocoPhillips. All of the involved GOM blocks are in the emerging Lower Tertiary play where ConocoPhillips has participated in the 2009-announced discoveries Tiber and Shenandoah.

Reilly will still control millions in ConocoPhillips stock. His Commission decisions will impact the future value of those holdings.

Rachel challenged appropriately, however the system hates publicizing insider connections, political and financial. Mr. Reilly looked distinctly more comfortable in his CBS News interview.

Update: Ken Salazar's abject failure "to thoroughly review" the
Deepwater Horizon blowout makes Reilly's commission more important.