Posts from ‘September, 2009’

In future, Shell will present its financial results in three segments: Upstream, Downstream and Corporate & Minority Interest, the company said.

BAGHDAD — Iraq risks missing a one-year deadline to strike a deal with energy giant Royal Dutch Shell for a four-billion-dollar gas production deal in southern Iraq, a government spokesman told AFP on Tuesday.

Alarmingly, despite the growing belligerence of Iran’s government, Europe seems more anxious than ever to make new energy investments in Iran. European energy firms such as Shell and Spain’s state-owned Repsol recently confirmed a $10 billion investment in Iran.

Whisper from a worried engineer:

We hear that the 3 musketeers Marvin, Matthias and Malcolm are unable to reach agreement on whether everyone in jobgroup 2 and above has to re-apply for a job in Shell.

Matthias as a good Swiss with a Teutonic streak wants to go for the ‘Endlösung’ and have it all over with soon by forcing a date for re-application to all jobs by end October.

But now for once the big brain of Malcolm, the mother of all micro managers, starts to feel nervous since he realises that HR cannot cope with the enormous load. Even HR can do overpromise-underdelivery!!!

So, the target of reaching 3.25 million boe/day in 2012 is becoming more unlikely by the day. Nobody is working on maintaining production, completing the projects or filling the funnel with new projects, everyone is fighting for survival and will spend all his/her time on looking good to whomever may decide whether he/she stays or goes.  Time is almost ripe for Exxon or a Chinese or Russian company to pounce and shred Shell to pieces.

Thank you Watts. Thank you Hofmeister. Thank you Brinded. Thank you van de Veer. Thank you Voser. Thank you all who have sold out Shell and are now speeding up the process of destroying it further.

More on Job Cuts

Royal Dutch Shell CEO Pete Voser first warned of job cuts months ago but has not been forthcoming on details.

The long delay has led to numerous press articles on the subject. The Times has reported that up to 10,000 jobs are expected to go.

This has all naturally led to speculation and rumor.

Here are some other rumors currently in circulation…

Some people apparently are whispering about cullings of 20-30% in Rijswijk and head office in The Hague…

EVERYONE in EP, with just a few exceptions, will have to reapply for their jobs…

OTHER RUMORS…

Motiva inside news, Motiva norco GM Ann-Marie has quit the company and going to work for another company outside of Shell. Maintenance Manager Tony Pastor going to convent.

Investigation said to have started at Shell Deer Park Refinery & Chemical Plant into people taking kickbacks from a contractor. We have the contractors name…

Received 25 Sept from a worker at Stanlow Refinery. “I attended a meeting this week organised by the operators union and decided I would join them to be protected at work. However I go into work today and all of us are told to go to meetings to be told by our supervision we should not join a union. I thought this was a illegal practice in the uk to be so anti union. I will still join the union but I will not let my boss know as I am scared it will go against me. There are many problems at Stanlow due to lack of investment and today we are told not to use the showers or drink the water or use safety showers as there is an employee in hospital seriously ill with legionaires disease.”

WARNING: These are rumors…

Attention Royal Dutch Shell Plc: If you confirm by email that any information printed under this headline is categorically untrue, it will be removed immediately.

From the Shell to Sea Campaign front line…

Opposition to the Corrib Gas Project in Ireland continues…

The 2006 policy of “no arrest” has been replaced with a policy of arrest, charge and get campaigners in jail out of the way. The abuse of the court system has been rampant with local retired teacher Maura Harrington jailed 4 times this year for alleged incidents during protest against the project. http://www.indymedia.ie/article/94011

Niall Harnett has also been targeted and jailed for alleged obstruction and assault on a Garda – despite video evidence shown in court which suggests otherwise. http://www.indymedia.ie/article/93525

Both are out on bail for appeal.

More recently, in a case brought by local woman Monica Muller, Shell have been found guilty of contempt of court – exactly the same reason used to jail the Rossport 5 for three months back in 2005. Sentencing has been deferred after Shell stated that they were “unhappy” with the ruling. http://www.indymedia.ie/article/93961

Shell to Sea court resumes next week with a raft of Shell to Sea cases to be heard in Belmullet from Monday the 28th to Wednesday the 30th, with Thursday and Friday also set aside if extra time is needed. There are court dates being scheduled for the rest of the year as well, with the possibility of more jail sentences being handed down.

Since the beginning of June water actions against dredging and the Solitaire – Shell’s contracted pipe laying ship – continued, forcing Shell’s dredging fleet out of Broadhaven bay on one occasion. http://www.indymedia.ie/article/92596

In one of the most shocking episodes of the campaign so far, a fishing boat was boarded and sunk out at sea in the dead of night by armed masked men. The crew – two local men opposed to the project – were held at gunpoint for hours and then left aboard a sinking ship. Thankfully they managed to launch the life raft and escape with their lives to tell the story. https://www.indymedia.ie/article/92657

This attack was not totally out of the blue however as earlier in the year Willie Corduff was badly beaten inside the landfall site by masked men. http://www.indymedia.ie/article/92036

In anticipation of protest against the Solitaire, the State sent in a force amounting to a hostile occupation – 350 Gardai, with Garda RIBs and a Garda helicopter, 2 navy warships with attendant RIBs and divers & an air force plane. This is on top of Shell’s private army of 200 IRMS security guards. IRMS is a company infamously specialising in “armed and unarmed” international security. http://www.indymedia.ie/article/92865

The Gardai continued abusing the public order act in a bid to quell legitimate protest on land. People were held in custody for days and only released on bail if they would stay out of County Mayo until their cases were heard. These over-the-top measures were for alleged minor offences, with none of the accused having previous convictions. http://www.indymedia.ie/article/92935

Oral Hearing

As Shell ploughed on with the Offshore pipeline in Broardhaven, An Bord Pleanala held an oral hearing into Shell’s application for a modified onshore pipeline route to link the refinery to the now laid offshore pipeline. The verdict is expected to be announced or before the 23rd of October. During the oral hearing, local expertise built up over the years, along with expert witnesses, forced Shell into admitting that their project creates a killzone along the pipeline route in the event of an accident. If permission is granted Shell say they will begin work on the onshore section next year.

ROYAL DUTCH SHELL WITHDRAWAL FROM GREECE

From a royaldutchshellplc.com contributor…

Responding to the comment that RDS is withdrawing from downstream, as evidenced by the withdrawal from Greece.

The Greece assets were acquired in 2000 in a swap with parts of the UK portfolio such as a terminal and unwanted (‘tail’) stations, the real driver for the deal was a local management desire for increased scale and to get a ‘seat at the table’ in the then SEOP organisation. the internal justification process – 501/502 as it was then known – was flawed in that the economics of the deal were questionable and the proposals put forward did not add up properly. There was a significant mistake in the analysis which omitted the actual opportunity cost of losing the UK assets.

There was no clear strategy at that point (2000 onwards) for the downstream portfolio – in truth ‘more profitable downstream’ was only an afterthought even in 2004 after the Reserves crisis – and the deal only worked with a long-term NPV calculation of twenty plus years to recover the quite expensive rebranding exercises that were put in place. The deal also fell foul of local practices and unforeseen dealer strength which pushed up the purchase price. The post-project review that should have highlighted these issues was in fact operated by one of the local management team in Athens who pushed the deal through, somewhat against the principles of audit generally and good practice.

Whilst these issues were identified and documented, they were quietly filed away in the time honoured manner in Shell and never published. One particular comment from an SEG-level manager at the time was ‘the deal was signed off at CMD level so there is no way we can go back and highlight these problems’. This person and their internal boss/client were incidentally ex-Enron; not sure what happened to that company but I am sure they would never do such a thing.

The bottom line is that the deal to sell Greece now is probably a net loss to RDS, certainly a fail against the 15% ROACE target from the halcyon days of Sir Phillip but there is no ongoing function or capability to actually monitor these activities and their real profitability. Behind this deal and the ongoing ‘drip drip’ of smaller scale asset sales in the downstream portfolio lies a need to gain extraordinary (i.e. non-operating) income to support the dividend policy as the core businesses are not sufficiently profitable in their current state. Interestingly however – and very much an age-old business school MBA problem from yonks ago – the ‘death by a thousand cuts’ approach exacerbates this situation in the downstream rather than resolves it as the main issue is the overhead cost base – hint… big white building by the Thames in London – as opposed to the regional operations which in most cases piece by piece are reasonably well run.

The link here of course is also to the main story this week showing a large increase in reserves and production predicted for the next five years. This was of course the very mandate to which van der Veer and Brinded signed up back in 2004 immediately after the reserves issue in order to placate the markets and salvage the RDS reputation and share price. The ‘hockey stick’ effect was predicted with a large increase late in the five year plan to 2009. Amusingly, this prediction has proven largely accurate – there has been a hockey stick effect but the curve dips down alarmingly rather than up.

To be fair to RDS and its leadership, most of the majors are in this situation and RDS are simply doing what they can… sitting and waiting and hoping for a big discovery (or three) that will get them out of jail. The cost base is massively inflated, specifically around the head office and non-core operations such as HR and Finance in particular and employment law in Europe (as opposed to the US and UK) means RDS is in a particularly difficult place. And its likely to get worse before it gets better.

UPDATED DECEMBER 2010

A BAE Systems insider from the AL-Yamamah and AL-Salam Projects in Saudi Arabia, is supplying internal BAE, Saudi, and UK MOD documents to the US Department of Justice (DoJ) which is carrying out an investigation into alleged corruption.

The samples we have seen include correspondence between high ranking officers in the British and Saudi military responsible for administering the Al-Yamamah oil-for-arms barter deal.

One example is a letter marked”SECRET” from Brigadier General Prince Turki Bin Nasser Bin Addul Aziz, Royal Saudi Air Force Al-Yamamah Project Officer, to an MOD Air Marshal within Project Al-Yamamah.

Extract from a Guardian newspaper article “Prince Turki: The man with everything“:

“The man who allegedly received most from BAE’s £60m slush fund, Turki bin Nasser, is a rich man. He has nearly 200 classic cars, a £20m private Boeing business jet, a large yacht called the Sarah, a sumptuous mansion in Beverly Hills and houses in Barcelona, Riyadh, Dharan and London. His London home is in Sussex Square, near Hyde Park.”

The UK Serious Fraud Office has investigated allegations of bribery relating to BAE and the Saudi royal family. The UK government stopped the investigation in the face of threats from the Saudis.

We have already published information revealing the involvement of the MOD, Shell, BP and BAE Systems in the controversial arms-for-oil project. There are articles published somewhere in the world almost every day about alleged BAE corruption. The following is an extract from an article published in The Times on 22 September 2009.

At about the same time Tony Blair was overriding the law of the land in unprecedented fashion to protect the Saudi Royal Family from a corruption investigation in connection with a BAE deal. Legally it was a scandal, but to do otherwise would have put a huge defence contract at risk (you could hear the French salivating), not to speak of the incidental disadvantage of severing anti-terrorist co-operation with Riyadh, which the Saudis had blatantly threatened.

The controversial decision to stop the SFO investigation – an unprecedented act which generated an international outcry that the UK was not meeting its obligations to combat corruption – undoubtedly damaged the reputation and standing of the UK.

In reaction to the astonishing surrender, the US issued a formal diplomatic protest and the US Department of Justice (DoJ) subsequently launched its own investigation, which is still in progress. Two BAE bosses were detained when they landed in the USA on business. Like the recent release of the Lockerbie bomber Megrahi to appease the Libyan Dictator Gaddafi (which also gravely damaged Britain’s relationship with the USA), oil was the main factor in the humiliating capitulation.

We have confirmed with an authoritative Washington DC source that the BAE whistleblower has, as he claims, already been in contact with the US DoJ.  His discussions with the DoJ took place in the USA. He has insider knowledge of the AL-Yamamah arms agreement between the UK and Saudi Arabia and alleges that BAE, Shell and BP are all complicit in orchestrating an international oil-money laundering scheme using the armament umbrella that for decades has remained shrouded in secrecy.

The whistleblower approached us because of the key role played by Shell in the oil-for-arms deal.  Shell has a close business relationship, on an international basis, with the Saudi regime via the state owned oil company, Saudi Aramco.

BAE Whistleblower Allegations

• Claims documents in his possession reveal how the laundered proceeds of oil sales under the Al-Yamamah agreement have been funneled by BAE, Shell and BP into various international financial systems.
• Proceeds of these oil sales were deposited in a secret bank account in London controlled by Prince Bandar and his father Crown Prince Sultan. The funds were in turn invested in various US securities and into the US stock market.
• AL-Yamamah has been, since 1985, “the smuggling proxy for Shell and BP tankers to loot millions of oil barrels from Ras Tanura to Rotterdam, where it is sold until this very day”.
• Bribes were paid to Prince Bandar from the revenues generated from money laundering the oil sales proceeds and deposited  into a US account at Riggs Bank in Washington and secret bank accounts in Switzerland.

The BAE whistleblower has supplied us with a statement which makes these and other serious allegations.

We have not read all of the documents, so we cannot say if the content substantiates the allegations made by the whistleblower. What we can say is that his claims as to being employed by BAE in Saudi Arabia, his possession of secret Al-Yamamah project documents, and his discussions in the USA with the US DoJ concerning supply of the documents as evidence in their BAE corruption investigation, are all genuine.

It is our understanding that the documents are being supplied to the US DoJ to coincide with the publication of this article and the imminent publication of a statement by the whistleblower. Consequently, the DoJ will have the opportunity to assess and determine the relevance and weight of the documentary evidence.

A decision by the UK Serious Fraud Office is expected later today regarding bringing a prosecution against BAE Systems in relation to alleged bribery in Tanzania, the Czech Republic, Romania and South Africa.

Update MARCH 2010: Link to legal document arising from BAE settlement of US Department of Justice charges.

RELATED ARTICLES

BAE Systems pleads guilty to conspiracy and is sentenced to pay a $400M fine: 1 March 2010

High Court halts BAE plea deal with SFO: 2 March 2010

Anti-arms campaigners halt SFO deal with BAE: 2 March 2010

BAE protesters win SFO injunction: 3 March 2010

Defense Contractor Agrees to Pay $400 Million Criminal Fine: 8 March 2010

Shell money laundering role in Saudi/BAE Systems corruption scandal: 20 December 2010

POSTING ON SHELL BLOG BY “Outsider”

How much did Shell pay Bloomberg to misquote their production forecasts?

It is unbelievable that two of Bloomberg’s journalists have put out a story, reprinted around the world again and again, which is completely false. Shell’s own forecast in the Deutsche Bank presentation is that they will be producing 3.2 MMBOE/day in 2012, while BP expect to produce 4.1 MMBOE/day.

Shell overtaking BP? I don’t think so. Some of the articles even attribute yesterday’s increase in Shell’s share price to the claim that Shell will increase their production by 30% – could it be that someone is deliberately trying to manipulate the share price?

SUBSEQUENT SHELL BLOG POSTING BY “INSIDER”

Outsider: well spotted! In Henry’s presentation he mentions a 5% decline from existing fields. This is hope over reason. Just look at viewgraph 8 of the famous overpromise-underdelivery presentation in 2000. I am sure you can get hold of a copy. In those days the decline of existing oil assets was 10% per year and this was based on very detailed and thorough work by professionals.

If anything, the decline will now be steeper because Shell has trained and developed people good at behavioural skills and preferably working in finance or HR and much less in the mundane fieldmonitoring and dreadful reservoir engineering. That is something the service contractors will do for us. (Remember that Jennings was of the opinion HR meant Human Remains, a scandal ensued and he apologised. But we were all wrong and he was right!!!).

So, if Henry thinks we will decline by 5%, this means gasassets are infinite and will not decline. Therefore I humbly suggest Simon to go speak (or more important, LISTEN) to some reservoir engineers who will explain it slowly to him. These should be reservoir engineers who are close to retirement and have nothing to fear. There should be one or two left… And don’t tell Brinded you spoke to a reservoir engineer because he might blow a fuse!

Couple all this highly optimistic forecasting (other people might call it lies) to the recent inability of Shell to deliver on major projects and the 3.25 mln boe/day becomes very dodgy.

No doubt we will be following the production endeavours of Shell on the Donovan site.

RELATED ARTICLES

Big-spending Shell ready to overtake arch-rival BP

Shell Upstream Boss Malcolm Brinded: Mr Overpromise and Underdelivery

Shell Output Set to Pass BP With $40 Billion Spent on Projects

Shell to overtake BP as biggest oil producer after $40bn investment

Shell output set to pass BP with $40bn spend spree

Shell output set to overtake BP with US$40b projects

Did Bloomberg publish false Shell production forecasts?

Jim Armitage

Shell is close to overtaking BP as Britain’s biggest producer, research showed today.

Held back by seven years of falling production, Shell’s output levels are about to erupt way beyond those of its arch-rival as a host of new investments in projects start to pay off.

Chief executive Peter Voser spent a record amount last year on expansion around the world, ranging from a massive oil sands development in Canada to the Sakhalin II project in Russia.

As a result, oil and gas output will be up a third, or 1 million barrels a day by the end of 2012. At those breakneck levels, Shell will be pumping out 4.25 million barrels against BP’s 2012 estimate of 4.1 million.

The shift will put BP back in second place after Shell faced production shortfalls from projects, most notably including Nigeria, where militants have repeatedly disrupted its operations.

“Shell will have so many startups in the coming five years that it will be impossible for European peers like BP to keep up,” said Peter Heijen, analyst at Dutch broker Theodoor Gilissen Bankiers.

Heijen is advising clients to buy the shares in anticipation of a 14% climb during the next year.

By John Donovan

Rumors posted earlier today confirmed

A leaked email dated 25 September 2009 sent on behalf of Tom Purves (Royal Dutch Shell Vice President Manufacturing US Gulf Coast and Motiva Vice President of Manufacturing), announces senior staff changes involving the Motiva Norco Refinery, the Shell Norco Chemicals Plant and the Motiva Convent Refinery.

Certain information has been removed to protect our insider source.

THE LEAKED SHELL/MOTIVA INTERNAL EMAIL

From: Deroche, Liz O MOTIVA-DMM/60
Sent: Friday, September 25, 2009 8:33 AM
Subject: Senior staff changes involving the Motiva Norco Refinery, the Shell Norco Chemicals Plant and the Motiva Convent Refinery

The following announcement is being forwarded on behalf of Tom Purves
***********************************************************************************

The following are senior staff changes involving the Motiva Norco Refinery, the Shell Norco Chemicals Plant and the Motiva Convent Refinery

Anne-Marie Ainsworth, General Manager Norco Refinery has decided to leave Motiva for other opportunities.  I want to thank Anne-Marie for the important contributions she has made to both Motiva and Shell.

Recently completed agreements by the owners, allow us to take the next steps in consolidating Motiva Norco Refinery and Shell Chemicals Plant under a single General Manager and leadership team structure.  Consequently I’ve asked, Hermie Bundick, currently serving as General Manager of the Norco Chemicals Plant to serve as the Interim General Manager of the Norco site – covering both refining and chemicals effective immediately.  A GM Norco Site job will be posted on Open Resourcing soon and announced once resourcing activities have been completed.

Please join me in thanking Hermie for his willingness to help Norco during this leadership and governance transition.

Additionally, Tony Pastor, Engineering and Maintenance Manager Norco Refinery will move to Motiva Convent as Production Manager replacing Roxan Kraft whose new appointment was announced earlier.  Given the leadership changes at Norco, the exact timing of Tony and Roxan’s transition will be taken under review and determined in the near future.

Given Tony’s move and agreements by the owners, we will also take steps to consolidate all of the engineering and projects and the maintenance and turnaround activities into two site leadership team roles.  In the near future a Manager Engineering and Projects role and a Manager Maintenance and Turnarounds role will be posted on Open Resourcing.  Engineering and Projects will have all hard side engineering and the project management function. Maintenance and Turnarounds will have all routine and special plant maintenance and the turnaround organization.

Please join me in thanking Tony for his many contributions to Norco and congratulating him on his new appointment.

Tom Purves
Vice President Manufacturing US Gulf Coast and Motiva Vice President of Manufacturing