Financial Times: Admission of troubles at Sakhalin-2 fuels fears Shell might miss targets
“In a conference call with analysts and journalists, Shell executives said they had received an interim report that put the overall cost of the project at $20bn (£11.4bn) – about double the original estimate. They also said the project would not start deliveries of the super-cooled natural gas until summer 2008, at least eight months later than planned.”: “The news revived fears that Shell would be unable to meet its targets to produce an average of 3.8m-4m barrels of oil equivalent a day by 2009.”
Friday 14 July 2005
By Thomas Catan
Published: July 15 2005
Perched on a remote island off the east coast of Russia, Sakhalin-2 has long been cited as the sort of difficult and large-scale project that would help Royal Dutch/Shell turn round its flagging oil and gas production.
The liquefied natural gas project was seen as a bright spot for the world’s number-three oil company after a humbling year in which it had to slash its reserves of oil and gas five times.
Yesterday, however, the company confirmed rumours that its flagship project was running behind schedule and was badly over-budget.