Martin Ayankola, Lagos - 01.12.2007

As Nigeria joins the global community in celebrating AIDS Day today, Shell Companies in Nigeria have restated their commitment to helping to contain the effect of the disease by raising awareness on its causes and management.

Celebrations marking the World HIV/AIDS Day is being held amid reports that the disease had so far claimed more than 25 million lives around the world in the last three decades.

The Executive Vice-President, Shell Africa, Ann Pickard, said, “Shell needs no prompting as it takes the issue of HIV/AIDS seriously.

“AIDS affects our employees, contractors, customers and the entire business environment.

“It threatens our ability to deliver the Shell business strategy. “According to the Joint United Nations Programme on HIV/AIDS (UNAIDS) some 2.5 million people were newly infected with HIV in 2007, and 2.1 million died due to AIDS-related illnesses (including 1.7 million adults and 330,000 children).

http://www.tribune.com.ng/01122007/news/news14.html

The Shell Manufacturing Centre opened at NAIT on Thursday. Watching an automated manufacturing line are, from left, NAIT president Sam Shaw, Western Economic Diversification Minister Rona Ambrose, and Shell oilsands vice-president Brian Straub.
Chris Schwarz, The Journal

Search is on for better, more efficient ways to extract harder-to-get crude

David Finlayson, The Edmonton Journal
Published: 8:37 am

EDMONTON - It’s got an automated manufacturing line with robots and some of the most sophisticated software anywhere, and it could be a key to extracting oilsands and shale more efficiently.

The new $14.6 million Shell Manufacturing Centre at NAIT will also help companies create state-of-the-art processes to meet global energy demand, Shell oilsands vice-president Brian Straub said Thursday.

The realities or the industry are that global demand for energy is increasing, and we can’t rely on easy oil from conventional sources anymore, Straub said at the official opening of the centre.

“Operational excellence is key to our industry’s success and this requires discipline, flawless execution, and the successful advancement of new technologies.”

Shell contributed $2.5 million to the centre, the largest single community investment the company has ever made.

Straub said non-conventional oil is labour and technology intensive, and NAIT will produce the skilled trades needed to build and run the complex operations safely and efficiently.

The nine labs provide cutting edge research and advanced manufacturing solutions in such areas as advanced hydraulics and pneumatics, computer assisted design, laser cutting and robotic welding.

It also has three “smart” classrooms wired to take advantage of the latest technologies, including data projection.

The centre, housed in an existing main campus building, will take about 400 students a year from various technology fields, as well as NAIT’s bachelor of technology degree program.

“It will help develop the next generation of skilled workers,” NAIT president Sam Shaw said.

“The students will gain the knowledge, expertise and skills to improve productivity and help their firms become more innovative.”

Canadian businesses face significant challenges to reduce operational costs and improve performance, and the centre will help them compete globally, Shaw said.

The federal Western Economic Diversification department had contributed $3.5 million to the project, but minister Rona Ambrose announced Thursday they would be adding another $1.1 million. She said that each new student the centre produces will help Canada’s manufacturing sector to greater success in the global market.

dfinlayson@thejournal.canwest.com

© The Edmonton Journal 2007

http://www.canada.com/edmontonjournal/news/business/story.html?id=8e4fcf2a-e002-49b8-9163-96ed0e0b5ba9

Friday, November 30, 2007

Faroe Petroleum plc, the independent oil and gas company focusing principally on exploration in the Atlantic Margin, the North Sea and Norway, has agreed a cross-border package transaction with Shell. The transaction, which is in line with the Company’s stated strategic objectives of Atlantic Margin and Norway exploration drilling and asset portfolio diversification involves the following:

• the farm-in to the Faroe Islands high risk/high reward William exploration well;
• the acquisition of a 10% interest in the Norwegian Trym undeveloped gas field; and
• the acquisition of a 10% interest in the Norwegian Granat exploration licence.

Faroese License L007 William (Faroe 5%)

The William oil prospect is a high risk/high reward exploration opportunity which lies within Faroes Licence 007. Joint venture partners in the licence are BP (50% and operator), Shell (20%) and Anadarko (25%). The main reservoir objective in William is in the Palaeocene and is located towards the flank of a known basalt sequence, approximately 20 kilometres north west of the “Longan” exploration well (drilled by BP in 2001), which encountered thick reservoir quality sandstones in multiple objectives.

Drilling of the well commenced on 22 October 2007 using the Transocean Rather, following its appraisal programme recently completed for Chevron on the Rosebank Lochnagar discovery West of Shetlands. The rig is located in water depth of 780 metres. The results of the well are expected to be known in the first quarter of 2008.

Faroe has agreed to farm in for a 5% interest, with a cap on its cost exposure whereby, depending on the well results, Faroe can elect to pay its share of any further costs in cash or by reducing its equity participation.

Norwegian License PL147 Trym (Faroe 10%)
The Trym gas and condensate field is located in Norway approximately 7 kilometres from the Harald platform across the border in Denmark, in 67 metres water depth. Shell is currently operator with a 50% interest, and the other joint venture partners are Bayern Gas (30%) and DONG (20%).

The Trym discovery well 3/7-4 drilled in 1990 tested gas and condensate from the Middle Jurassic reservoirs at rates of 29.6 million standard cubic feet per day (mmscfd) and 3800 barrels per day (bbls/d), respectively. The Jurassic Reservoir is composed of two distinct formations, the Lindesnes and Bryne. The base case gas reserves for the field is 120 billion cubic feet (bcf) (12 bcf net to Faroe) and condensate reserves of 4.7 million barrels (mmbbls) (0.47 mmbbls net to Faroe). The licence also benefits from several additional prospects with potential for tie back for development.

The Trym field development plan submitted by Shell to the Norwegian authorities in 2006 (FDP 2006) involved a horizontal tri-lateral sub-sea completion which allowed for two horizontal wells, with a tie-back to the Harald platform in Denmark, and onwards into the European gas transmission network. The FDP 2006 was not approved by the Norwegian Government. Since then StatoilHydro has sold its 30% interest in Trym to Bayern Gas and Shell has indicated its intention to sell down its entire 50% interest including operatorship. It is expected that following the assignment of operatorship and a subsequent period to review the project and the commercial agreements, a revised FDP will be submitted to the Norwegian authorities.

Norwegian License PL381 Granat (Faroe 10%)
The Granat Licence PL381 was awarded to Shell (70% and operator) and DONG Norge (30%) in the APA 2005 licencing round. The licence covers an area of 116 square kilometres and includes part blocks 6407/5 and 6407/8 and is located 15 kilometres to the northwest of the Draugen Field and 30 kilometres east of the recent Onyx South West discovery, both of which are also operated by Shell.

In the vicinity there have been three recent nearby discoveries (Tott East, Onyx South West and Njord North West flank) and five further wells are to be drilled in the area by 2010. The Middle Jurassic Granat Prospect is the primary target of the PL381 licence. Granat is a large prospect within a proven petroleum system, located in an area of the Norwegian Shelf that is being actively explored, with recent success. A drill or drop decision is required under the licence before 6 January 2009.

Completion
Completion of the transaction is subject to the consent of both Ministry of Trade in the Faroes, the MPE in Norway, and all joint venture parties.

Graham Stewart, Chief Executive of Faroe Petroleum, commented:
“This is a further exciting cross-border package transaction for Faroe Petroleum with a high impact exploration well drilling right now in the Faroe Islands, together with another high potential exploration prospect and a very attractive near-term gas field development in Norway. These new interests in our core areas further boost the Company’s work programme and shareholders’ exposure to substantial value creation in the portfolio.”

http://www.oilvoice.com/n/Faroe_Petroleum_Acquires_Cross_Border_Package_of_Shell_Assets/6044b5fc.aspx

Reuters
November 30, 2007

ASTANA (Reuters) - Kazakhstan demanded $7 billion in compensation from an Eni-led consortium on Friday for delays in developing the huge Kashagan oilfield, a source close to the talks said as a deadline for a settlement was hours away.

Kazakhstan has set the November 30 deadline for its negotiations with the group to resolve a long-running dispute over cost overruns and production delays at the Caspian Sea oilfield, but some officials have said talks may last longer.

“(We demand) more than $7 billion. That’s for the delays,” said the source, who declined to be identified.

Eni had no immediate comment. Kazakhstan had previously demanded more than $10 billion, according to other sources.

Kazakhstan heaped further pressure on Western investors on Friday as Deputy Finance Minister Daulet Yergozhin announced it planned to introduce a new oil production tax to boost budget revenues, probably starting in 2009.

Kashagan, with its estimated 38 billion barrels of oil in place, lies at the heart of Kazakhstan’s plans to triple its crude output by 2017 as the former Soviet state fast emerges as a new source of non-OPEC oil.

But its development has been plagued by cost overruns and delays which have irked Kazakhstan. It is now due to start production in 2010, instead of 2005 originally. Its costs have escalated from $57 billion to $136 billion.

Speaking earlier in the capital Astana, Yergozhin said a high-profile consortium delegation was in the Kazakh capital on Friday to discuss the future of the world’s biggest oil find in three decades.

“We are continuing our talks. November 30 is not over yet,” he said. “I think we still have time. They are still here. … We are discussing many issues.”

COMPENSATION

Officials have said, however, that talks might continue until the end of the year.
Sources close to the deal have told Reuters that one of the consortium members considered pulling out altogether from the complicated project.

Yergozhin said Kazakhstan was discussing a possible scheme to secure a share of profit from Kashagan earlier than planned and still wanted Kazakh national oil firm KazMunaiGas to be co-operator of the field, currently managed by ENI.

“We’ve said that KazMunaiGas should be co-operator,” he said. “Kazakhstan cannot choose the operator unilaterally. The operator is chosen by all consortium companies.”
Asked whether they have proposed to change the operator, he said: “The consortium has not officially proposed anyone.”

Kazakhstan has accused Eni and its partners — Royal Dutch Shell Plc, Exxon Mobil Corp, Total, Conoco Phillips and Japan’s Inpex Holdings Inc — of ecological and other violations at the Kashagan field.

Kazakhstan put further pressure on the Eni-led group and alarmed other investors in the oil and gas business by passing legislation allowing the government to break contracts with foreign companies.

(additional reporting by Milan bureau)
(Writing by Maria Golovnina, editing by Anthony Barker)

(c) Reuters 2007
 
http://finance.sympatico.msn.ca/investing/news/breakingnews/article.aspx?cp-documentid=5795795

”SPACE, VISION AND STRATEGY”: Sir Philip Watts, sacked Shell Group Chairman who once donned a space suit at a meeting in Maastricht, Netherlands, in 1998 to pump up his troops. General David Greer took a different but equally amusing approach earlier this year before his resignation as Deputy Chief Executive of Sakhalin Energy Investment Company.  

RELATED EMAIL FROM A SHELL INSIDER RECEIVED IN NOVEMBER 2006

Dear John

When I was cleaning up my old PC and migrating all data to a new model, I stumbled across some old stuff that I hope you will post on your site. I also have some comments to make as I have no other avenue to vent my frustration, anger and yes, sadness at what has happened to a company of which I was once proud to be associated. Now I am but one of many demoralised, disillusioned and disappointed employees waiting retirement.  

It will show the world why Shell is nowadays in such a mess. Most senior managers of 10 years ago are still around, desperately hanging on to their jobs after using shareholders money to hire expensive lawyers to keep them out of jail. I have included some comments from an earlier letter since you now have a much larger audience.  

Firstly, I will briefly mention the overall background to the mess in which we now find our company. I would then like to remind colleagues about a lucid Shell internal presentation document dated 26 June 2000. It is interesting and educational to reflect on the content and prophetic warnings six years on. I will conclude my musings with a rousing song which our beloved senior management will be overjoyed to hear and see on your website which I am sure will add even further to their affection for you and your father. 

BACKGROUND

Great changes, such as the large reorganisation started by Cor Herkstroeter in 1994, created great stress in the workforce. These changes were considered unnecessary by Bob Sprague, one of the cleverest people who ever worked for Shell. But initially this was still fairly positive stress and it led to a feeling of freedom and desire to conquer and improve the world. Remember, at that time we were the biggest and the best oil company and had been since the mid 70s! So there was still a lot of latent know-how and professionalism around, which the company cannibalised in creating a ‘new Shell’ with ’self managing teams’, ‘Olympic targets’, ‘unleashing talent’ and other trendy nonsense. It even led to record profits in one year, I believe it was 1997.

THE MACARENA 

Moody-Stuart took over the reins of power from Herkstroeter and unleashed another reorganisation, this time labelled “transformation” – the code word for mass redundancy in which we lost many of our best staff (and are still suffering the consequences).  Senior management made complete asses of them selves by dancing the Macarena at a Shell function.  During the Moody-Stuart tenure someone had the brainwave of setting up “hydrocarbon value creation teams”. The foundations for the reserves scandal were laid. 

The company had got (with the explicit knowledge of the top brass) into the hands of people who were only motivated by personal rewards, and who smelled their chance. None of that ‘Enterprise First’ stuff. It was ‘Me first’ and all the snouts were in the trough and nobody wanted to take their snout out of the trough. Anyone complaining or making remarks that things were not right was publicly destroyed and removed. And those with their snouts in the trough started to make promises and ever more ridiculous demands. Explicit instructions to cook the books or ‘err on the high side’ were hardly given in written form or were at least well disguised. It was said and whispered in meetings, conferences and workshops and personal discussions during the annual staff evaluation time. There were clear instructions to aim for the impossible with those stretched targets and anyone who said he could go even further or higher was handsomely rewarded with promotions or fat bonuses.  Brinded was a real champion of this, he was #2 and later MD in Shell Expro and I believe they missed their business targets for 7 years in a row under his reign!  

When Watts came to power (he actually stole that job at the time with his gorilla talk and behaviour) the pigs were truly feeding. Watts started his circus with new and bigger promises every year. And then it became unsustainable and the truth came out. We have internet, everyone knows what has happened and why it happened. Inflated reserves, massive fines, massive bad publicity which brought about the end of Anglo Dutch Shell in the form in which it had flourished for 100 years.  

THE PRESENTATION

The internal presentation was made to Shell Exploration & Production senior managers, including Phil Watts. It shows very clearly that at that time, Shell E & P were embarking on another cycle of over-promise and under-delivery. The people in the Capital Allocation department (CA) had made very extensive analysis of past performance (against past promise) and showed there was a very distinct break in trends. 

From 2001, all trends increase steeply at an angle of existing trends. Clearly a lot of hyperbole was built in to all the plans of all the operating companies. But the senior management of E & P (and therefore the senior management of Shell) did nothing: they simply did not want to hear. And with the power of hindsight, it turned out much worse than predicted, and Shell was only saved by the steep rise in oil prices.

A mixture of telling and prophetic headlines from the presentation:

Projects appear over-optimistic both in Exploration and Production 

The Capital Allocation Process appears to be flawed with overstatements of key parameters to secure funds 

We run the risk of initiating an Over-promise Under-delivery Cycle….. 

Most large post-FID projects indicate underdelivery 

New projects have very aggressive FID dates 

Extremely optimistic when compared with history 

LINK: Excom Early Look Business Plan 2000

THE SONG

They were all singing along with this attached song!!!! Nobody spoke up. The CMD danced the Macarena. People resigned because they saw Shell was going over the cliff. And still nobody woke up. Staff in the Philippines working on the Malampaya project signed some of their personal promises and goals with their own blood and pinned the documents on the wall of the office. And still nobody woke up.  Instead some bad apples took the power and started the period of promise over performance and removal of the non-believers. The result was the Reserves crisis and of late the Projects crisis. I hope someone will some day write a book on how a great company was destroyed in a short period.  

If we go back to the heady days of Phil Watts, where he did some time-travelling to the future and returned in a horrendously expensive spacesuit to tell the large audience of the self proclaimed ‘Leaders’ of Shell that he had seen the future and liked it. Presumably we are in that future now. Since as a good born again Christian he would never lie, I can only assume he compared the current state of affairs with Hell. And this is indeed better than Hell (so he must be feeling more miserable by the day as he gets older and closer to the day of the final judgement….)!  

I also remember a movie that Shell made in those days looking in the future. That was 2007 and a young Chinese woman was running Shell, from an office somewhere in Moscow!!!. Major problems were presented to her and by using the latest IT technology, she tapped three buttons to get all relevant information at her disposal and she solved these problems within seconds. But I apologise, there were no problems, there were only challenges. She exhibited no stress at all. Could go home early to look after the kids, Shell had self managing teams and needed only a minimum of steering. So, if it was all correct, we can see Jeroen stepping down soon and making room for this Chinese woman who will sort out Sakhalin in no time. But since there is no Chinese woman in sight near the top, either the head-hunters are making overtime or Linda Cook may have to take that role. Fortune telling is no hard science after all and we can forgive the LEAP people to only get the type of woman wrong.

The attachments are the lyrics of a song as well as the song itself. I do not know whether you are allowed to publish the song without breaking copyright laws. 

All this emanated from the collective madness that gripped Shell. The leaders of that day (most still on active duty now) created LEAP and this was used as an engine to transform the company. The transformation is now nearly complete and Shell is also wrecked. Putin will soon put them out of misery it appears. 

The inventor and director of LEAP was Gary Steel, one of many HR gurus that blindly followed the ideas of the big bosses. His motto was ‘me first rest later and always agree with the boss’. He was the one that got the CMD dancing the Macarena. In itself a great achievement. I bet they still feel bad about it. Steel is now HR director in ABB http://www.abb.com/cawp/abbzh253/3e6d078754bd3b43c1256d41005119f1.aspx

Poor staff in ABB, I feel sorry for them. 

In the meantime I will bide my time in Shell. The pay is good, some work is half interesting and it will last my days until retirement. And I can watch them squirm. I can also enjoy the amusing spectacle of the pompous windbag John Hofmeister peddling his PR bullshit in a 50 city tour of America as President of Shell Oil. This swollen headed throw back to the days of snake oil salesman will surely need to buy a larger Stetson. More empty words and promises instead of truth and integrity. The days when we could be sure of Shell are long gone. 

Presumably you will understand why this has to be anonymous.

http://royaldutchshellplc.com/2006/11/13/song/

The Lyrics

GROWING AND WINNING (WE ARE THE WORLD)
THERE CAME A TIME
WHEN WE  HEED A CERTAIN CALL
FOR CHANGE , WE NEED TO BOND TOGETHER AS ONE  

NOW WE’RE ON A JOURNEY
TO STREAMLINE THE WAY WE WORK
AND BUILD A GLOBAL ENTERPRISE

WE HAVE MOVED ON, GROWING DAY BY DAY
SHARING STRENGTHS, WE PRACTICE WHAT IS BEST
WE ARE ALL A PART OF
SHELL’S GLOBAL FAMILY
DOING WORK ALIGNED WITH EVERYONE
(Chorus)
WE ARE THE BEST
WE ARE ALL WINNERS
WE ARE THE ONE’S WHO HAVE MADE THE CHANGE
WE’VE GROWN THE BUSINESS
WE ARE SHELL’S TOMORROW
B2B, WE’RE ONE GREAT TEAM
WITH OUR SPACE, VISION AND STRATEGY
WE WILL SUCCEED

WE’LL WORK WITH OUR PEERS
CAUSE THEY’RE PART OF OUR TEAM
HAND IN HAND WE’LL BUILD THE VISION WE PLANNED

OUR HIGHEST GOAL IS TO BE THE CUSTOMER’S BEST CHOICE
FOR THE TEAM, WE MUST LEND A HELPING HAND
Repeat Chorus

WHEN TRIALS ABOUND
OUR MISSION SEEMS IMPOSSIBLE
BUT IF YOU JUST BELIEVE
THERE’S NO WAY WE WILL FALL

WELL, WELL, WELL, LET’S REALIZE
THESE TRIALS WE’LL OVERCOME
WHEN WE…..STAND TOGETHER AS ONE
Repeat Chorus

SONG THANKFULLY ENDS

To hear the song go to…

http://royaldutchshellplc.com/2006/11/13/song/

Shell confidential reserves fraud discovery document published on Friday 30 November 2007

ROYAL DUTCH/SHELL GROUP OF COMPANIES: 2001 Confidential “Management/Market Analysis and Perception Study”

Some extracts:

“I like Phil Watts. He is an ‘upstreamer’ and has a good understanding of the business and is looking to grow it profitably.”

“RD/Shell’s management comes across as honest and credible.”

“Management’s weakness is that they got ahead of themselves in their promises.”

“They give us all these colorful slides, but when they are compared to reality, they always fall short.”

Part 1 (16 pages)

http://www.shellnews.net/classactiondocs/ex137_420_3.pdf

Part 2 (15 pages)

http://www.shellnews.net/classactiondocs/ex138_420-4.pdf

Part 3 (19 pages)

http://www.shellnews.net/classactiondocs/ex139_420_5.pdf

Part 4 (14 pages)

http://www.shellnews.net/classactiondocs/ex140_420_6.pdf

Part 5 (16 pages)

http://www.shellnews.net/classactiondocs/ex141_420_7.pdf

All are pdf files and Adobe Reader is needed to access them. Please be patient when loading as multiple pages are involved. To download a FREE Adobe Reader click on the adobe link:

http://www.adobe.com/products/acrobat/readstep2.html

DAVID EBNER
Globe and Mail Update
November 30, 2007 at 7:35 PM EST

TransCanada Corp. is among the companies vying to build a $30-billion natural gas pipeline to connect northern Alaska with the continental United States.

Calgary-based TransCanada, the country’s largest gas pipeline company, said Friday evening that it has submitted a “strong application” to the state of Alaska to build a line from the north slope of Alaska, home to major stranded gas reserves, to link to the firm’s existing Alberta infrastructure.

TransCanada did not reveal the price of the proposed project or other details, saying it would wait for Alaska to assess its application.

Among other companies that revealed their ambitions yesterday was ConocoPhillips Co. of Houston, the oil and gas producer that controls gas fields in Alaska.

ConocoPhillips proposes $30-billion Alaska pipeline 

ConocoPhillips said its project could cost between $25-billion and $42-billion, saying $30-billion was its best estimate right now. The company’s proposal is similar to that of TransCanada, linking Alaska with Alberta. ConocoPhillips said it would consider a further extension to Chicago, depending on available capacity on existing infrastructure.

Alaska was expected to unveil a complete list of applicants late Friday night.

Because construction isn’t likely to begin before 2013 or 2014, the Alaska project isn’t likely in direct competition with a plan to build a gas pipeline from the Mackenzie Delta in the Northwest Territories to Alberta. Mackenzie construction could start in late 2009 if it receives regulatory approval.

Volume on the Alaska pipeline could be four billion cubic feet a day — more than 5 per cent of estimated demand in the United States in 2025. The Mackenzie Valley pipeline could deliver upwards of two billion cubic feet a day, though initial plans are for 1.2 billion cubic feet a day.”

“[Alaska] is a monumental project and a huge amount of gas,” analyst Fadel Gheit of Oppenheimer & Co. told Bloobmerg News.

A plan to build a pipeline to deliver gas from Alaska has languished for years but this decade has become more realistic as the price of the commodity has averaged roughly $6 per million cubic feet, triple the rate of $2 seen in the 1990s.

Proposals to the state of Alaska were made under the Alaska Gasline Inducement Act, a law passed under Gov. Sarah Palin that outlined rules for ideas for a pipeline. The No. 1 plan is expected to be put before the state legislature in early 2008. The system follows a previous deal that was scrapped that had been negotiated between former Gov. Frank Murkowski and the three largest gas holders, Exxon Mobil Corp., BP PLC and ConocoPhillips.

Earlier Friday, BP reiterated its position that it will not submit a proposal under Gov. Palin’s system. Exxon said it was considering its options.

Exxon owns about 70 per cent of Imperial Oil, the main proponent of the $16-billion Mackenzie pipeline. ConocoPhillips is also involved, as is Royal Dutch Shell PLC.

ConocoPhillips said it would be interested in having partners. TransCanada said it was also interested in that possibility.

“It has been our long-standing position that an alignment of the state, the producers and TransCanada is the optimal path to a successful project,” said Tony Palmer, a TransCanada vice-president.

TransCanada is currently a partner with ConocoPhillips on a proposed oil pipeline to the U.S.

Another possible Canadian player in Alaska is TransCanada rival Enbridge Inc. but