A group of American and British shareholders in BP joined forces yesterday to protest over the oil company's decision to start extracting oil from Canadian tar sands.

Eleven fund managers, which together manage total assets worth more than $10 billion (£5 billion), said that BP's move into tar sands last year was “deeply disappointing” and represented a “disturbing step backwards” for the company.

In a reversal of the group's former stance on oil sands, BP entered the business last December when it announced a joint venture with Canada's Husky Energy to co-develop the Sunrise project in Alberta, with a joint investment worth $3 billion. The first oil is expected to be produced in 2012, with output likely to rise to 200,000 barrels per day within a decade.

The fund managers, who together hold about $40 million of BP stock, include Boston Common Asset Management, Trillium Asset Management, Rathbone Greenbank Investments and NorthStar Asset Management, and used BP's annual meeting in London yesterday to issue a joint declaration emphasising the environmental damage caused by extracting oil from the bitumen-rich sands.

Miles Litvinoff, of the Ecumenical Council for Social Responsibility, said: “Oil sands development offers some of the worst life-cycle environmental impacts of any fossil fuel - emitting nearly triple the greenhouse gas emissions of traditional oil extraction.

He said: “Prior to BP's announcement in December, we had understood that our company would not pursue tar sands development due to the heavy carbon footprint of both the operations and the end product. We fear the implication that BP is retreating from an excellent strategic position designed to exploit the long-term shift away from high-carbon fuel sources and question whether this may undermine BP's future competitiveness.”

Sir Peter Sutherland, BP's chairman, responded by saying that BP was taking steps to mitigate the negative environmental impacts of the project and remained committed to renewable energy. Mr Hayward also expressed optimism that the company would exceed the production goals it promised to deliver through to 2020.

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