Posts from ‘September, 2009’

Tuesday September 15,2009

Shell, along with partners Chevron and ExxonMobil, said the much-delayed Gorgon LNG project off the coast of Western Australia would be built at a “lower than expected cost” of $37billion (£22.2billion) as the recent downturn in the industry bit into ­capital costs.

Chevron will hold a 50 per cent stake in the project, which will begin production in 2014 with an annual capacity of about 15million tonnes per year or eight per cent of the world’s LNG production.

Shell, led by chief executive Peter Voser, and ExxonMobil will each hold 25 per cent stakes.

A Shell spokesperson said the facility would have a “long life” and be an “important cash stream for years to come”. Shell’s shares dipped 2p to 1689p.

“This is a great milestone for Shell,” said Jon Chadwick, Shell’s executive vice president for Australia. “Gorgon will provide important supplies of energy to the fast-growing economies of the Asia-Pacific region.’

Sales contracts for more than half of Gorgon’s annual output have already been agreed with Chinese, Japanese, Indian and South Korean customers.

This includes a long-term supply contract between Shell and PetroChina signed in November 2008 for two million tonnes of LNG per year.

Shell and Chevron said they would secure more sales in the coming months.

“We’re confident of demand. Shell’s access to LNG import terminals around the world will give us further options for Gorgon gas,” said Chadwick.

A Shell spokesperson added: “The Asia-Pacific region is expected to be the world’s largest oil and gas ­consumer by 2030.”

The Gorgon gas field was discovered more than 30 years ago but production has been delayed, in part by environmental concerns.

As part of the go-ahead the Australian government has imposed stringent environmental conditions to protect more than 20 endangered animals in the area including the spectacled hare-wallaby.

Yesterday’s announcement was more good news for the industry following two major oil discoveries this month by BG Group off Brazil and BP in the Gulf of Mexico.

EXPRESS ARTICLE

Tue Sep 15, 2009 1:04pm EDT

By Emma Farge

BRUSSELS (Reuters) – Oil major Royal Dutch Shell (RDSa.L) plans to divest its global refining assets to the tune of around 15 percent in the next few years, a senior company official said on Tuesday.

“We are looking to reduce overall refining assets by around 15 percent,” Mark Gainsborough, Shell’s executive vice president of downstream strategy, said in a panel discussion at an industry conference.

That represents about 600,000 barrels per day.

The figure is larger than the combined capacity of the refineries, which the company said in March might be sold.

Shell said it could sell refining assets in Germany and New Zealand representing 200,000 bpd capacity.

It is also looking to sell its 267,000 bpd Stanlow refinery in the UK and industry sources said India’s Essar Oil had submitted bids.

Most oil majors have been selling small oil refineries to focus on large, complex plants equipped with advanced refining systems such as Shell’s Pernis, Europe’s largest, in the Netherlands.

After selling a number of refineries and fuel retail operations in Europe and Africa in recent years, Shell now has a refining capacity to process about 4 million bpd of crude oil.

About 45 percent of Shell’s refining capacity is located in Europe, where in general refineries are relatively simple and old while competition from new, advanced and cost effective refineries in India and the Middle East has been increasing.

“Europe is not the place to have an out-and-out merchant refinery,” Gainsborough said. “For an asset to have a long-term future it needs to be world scale or be in a very secure niche.”

FINANCIAL PLAYERS AND TRADE BUYERS

Gainsborough said Shell had been in talks with a number of potential buyers for the German assets.

“There are still some financial players out there and there are plenty of trade buyers,” he said. He declined to give further details.

In a separate interview with Reuters on the sidelines of the Brussels conference, Gainsborough said Shell’s German refineries were “just too small.”

He added that European refiners below 200,000 bpd would struggle to compete on the international export market.

Refineries on the U.S. East coast probably needed to be 400,000 bpd to succeed in current market conditions, he said.

On the other hand, Shell had not ruled out buying downstream assets even as it looked to make further refinery divestments.

“If a good opportunity comes up, even in Europe, we would still take a look,” Gainsborough told reporters.

(Editing by Ikuko Kurahone and James Jukwey)

© Thomson Reuters 2009 All rights reserved

REUTERS ARTICLE

CALGARY, Alberta (Reuters) – Royal Dutch Shell Plc has suspended production at its Canadian oil sands mine after environmental activists blockaded a massive dump truck and mining shovel to protest the impact of oil sands development, the company said on Tuesday.

Oil company’s ‘golden goodbye’ made Linda Cook the second highest-paid businesswoman in Britain

Terry Macalister, Monday 14 September 2009 18.39 BST: guardian.co.uk

Linda Cook earned £3.9m last year, making her the second best-paid businesswoman in Britain. But the former head of gas and power at Shell only achieved the top remuneration spot after a “golden goodbye” when she left the company after 29 years’ service.

The Unionised operators group, of Unitetheunion (T&G section), at Stanlow Manufacturing Complex have started a website to keep their members informed of what is happening regarding any potential sale of Stanlow by Shell. They have also added a “Message of Support Link” for people to show their support in their fight to maintain their terms and conditions in any transfer.

It has come to our attention that former Shell executive Paddy Briggs (above) has been elected to serve the thirty-three thousand Shell pensioners in the UK as a Trustee of the Shell Contributory Pension Fund for four years commencing January 2010. In addition to the elected members, the Board of Trustees has seven Shell appointees, including UK country chairman James Smith and Clive Mather, the Chairman of the Board.

The manifesto on which Paddy Briggs was elected was:

“I joined Shell Mex and B.P. in 1964 and retired from Shell in 2002 having worked in Shell UK Ltd, Shell International and operating companies in The Netherlands, Hong Kong and Dubai. The Shell that most of us once worked for is long gone – as the “reserves” scandal and the recent furore over top executive remuneration have shown. Such events, coupled with the deteriorating financial position of many pensioners (which was exacerbated this year by a derisory 0.9% annual pension increase) illustrate the extent of the changes in Shell and confirm the urgent need for a strong defence of SCPF member interests by the one elected MNT Trustee directors. I was “First reserve” in the elections in 2007 and hope to go one better this time around. If elected I will do my upmost robustly to represent the interests of the Pensioner constituency and all other beneficiaries of the fund.”

We will quite understand that with Paddy concentrating on his new duties, he is probably unlikely to have the time to continue his insightful, candid and often entertaining contributions on this website. And he may also feel that it would be inappropriate to be an outspoken critic of Shell at a time when he has to work closely with senior Shell personnel in order to protect the interests of the members of the Pension Fund.  Over the years  Paddy’s  plain speaking and knowledge in his published articles, and his thoughtful comments posted on our Shell Blog, may have helped to persuade Shell UK pensioners that he is exactly the right person to represent them at this time. We wish him well.

Quite frankly, we have been surprised that Shell did not retain Paddy as a brand consultant given his continuing interest in Shell and invaluable marketing expertise. At least his fellow Shell pensioners will now benefit from the outstanding qualities which made him such a successful executive during his long career with Shell. And we are always here should Paddy feel that he needs a public platform again!

Launching a brand new company at such a prestigious event as Offshore Europe would fear even experienced business men, but for Peterhead man, Kevin Forbes, it was the ideal launching platform for his new venture www.oilandgaspeople.com and an opportunity not to be missed!

DORAL, Fla. — As part of the ongoing transition of Shell and Motiva gas stations from direct to wholesaler supplied operations, Shell subsidiary Motiva Enterprises LLC has sold all of its stations in the Miami-Dade County, Fla., market to Sunshine Gasoline Distributors, a Doral, Fla.-based oil company.

Jon Chadwick, Shell’s Executive Vice President, Australia – Upstream, said: “The Gorgon project will provide important supplies of energy to the fast-growing economies of the Asia-Pacific region and will have a domestic gas supply component which we anticipate will be jointly marketed to gas customers in Western Australia.”

A fine insight was provided this year by Shell, whose pay committee awarded £3.6m in bonuses to executives even though performance targets were missed. The justification was that the scheme allowed the committee to apply “discretion”. Shell’s cheek was so bare-faced 59% of shareholders voted against the pay report.