Posts from ‘November, 2009’

FT: Shell CEO on debt, gas, Iraq, mergers, and more

November 26, 2009 12:01am

by Ed Crooks

The reorganisation “moved very fast” in 2009, Mr Voser said.

• For 15,000 posts, people have had to re-apply for their jobs.

• About 50,000 people work in the areas affected by cuts, out of Shell’s total workforce of 102,000, and in those affected areas 10 per cent of the staff have gone.

• Even in the newly-created projects and technology division, which is a centre of expertise for the group to draw on, 1,800 jobs have been cut from a workforce of 10,000 as duplicated roles are abolished.

• There will be more redundancies next year, too, although he refused to put a figure on how many.

FULL FT ARTICLE (SUBSCRIPTION)

BHP, the world’s largest mining company, may be interested in buying Woodside with the approval of 34 percent shareholder Royal Dutch Shell Plc, the Australian Financial Review’s Street Talk column said yesterday.

Tue Nov 24, 2009 7:35pm EST

LONDON (Reuters) – Royal Dutch Shell’s (RDSa.L) (RDSa.L) chief executive is forecasting that the oil giant will not need to borrow any more money if oil remains at about $80 a barrel, the financial Times reported in its Wednesday editions.

The comments from Peter Voser, are a sign of how the oil industry has recovered from its lows earlier this year, the FT said.

Oil prices have risen from below $33 a barrel last December, although they are still around 48 percent lower than a record above $147 reached in July 2008. U.S. crude for January delivery is at about $76 a barrel. <O/R>

Voser also said Shell was talking to Russian companies about developing gas reserves of the Yamal peninsula, the newspaper added.

(Reporting by Michael Taylor; editing by Andrew Hay)

SOURCE ARTICLE

Royal Dutch Shell is hopeful that it will gain an equity stake in a giant Russian gas field that could supply all of the world’s needs for a decade. Peter Voser, Shell’s chief executive, said that talks with the Russian government about the Yamal project in the Siberian Arctic were progressing well.

Shell’s gas-to-liquid project in Qatar

• Shell’s chief executive reveals two $18bn gas projects
• Despite oil expansion, gas is key to company’s future

Tim Webb
guardian.co.uk, Tuesday 24 November 2009 21.06 GMT

Peter Voser is reeling off Shell’s projects to develop the next generation of biofuels when he gets to its algae scheme in Hawaii. He stops mid-sentence with a doleful look on his face. “I’ve never been to Hawaii,” says Voser, whose whistle-stop tour of Shell’s operations around the world most recently took him to Qatar and Nigeria. “Such are our hardships,” he jokes.

Voser was Shell’s finance director until he took over from Jeroen van der Veer on 1 July as chief executive. He tells the company’s in-house magazine “I love a down-to-earth mentality” and “I’m not a big-ego chief executive type”, befitting his Swiss nationality.

But this week, Voser rolled out Shell’s big guns – two mammoth $18bn (£11bn) gas projects in Qatar, to be precise – in a most un-Swiss manner. On Tuesday, he and Shell’s top executive team led 50 analysts and investors around the two huge construction sites that hold the key to Shell’s future growth: the Qatargas 4 liquefied natural gas project and the Pearl gas-to-liquid project, the world’s largest of its kind. When they ramp up fully, with large-scale production due to start in 2011, they will produce about 350,000 barrels of oil equivalent a day, or about 10% of Shell’s current daily production. Shell said that, once on-stream, the projects would generate $4bn of cashflow and mean that by 2012 the company will be producing more gas than oil.

Shell also announced that testing at the Pearl project had begun but confirmed that the start-up of the Qatargas 4 project would be delayed by 10 months, to the end of 2010. Analysts said they had expected delays but Samuel Ciszuk, analyst from Global Insight, said: “It still does not look very good from a project-management point of view.”

Now is a good time to trumpet Shell’s mega-projects, and not just for the benefit of new man Voser. When Shell announced results last month, finance director Simon Henry was downbeat about next year, which could see Shell miss its production targets, particularly with confirmation of the Qatargas 4 delay.

The credit crunch and the resulting slump in oil prices forced Shell, like the rest of the industry, to put on hold expensive new projects such as oil sands in Canada. It has projects under construction that will when completed add another 1m barrels of oil a day but most of these will not come on stream until 2011 or afterwards. Shell wants investors to focus on the rewards to be reaped in 2011 and beyond, rather than next year’s slim pickings.

Voser said that Shell was also reviewing its procurement policy. As a result, of the annual $7bn it spends on procuring drilling services and equipment, for example, it has found 15% of savings. This is partly the result of buying more equipment from China, which is about 20% cheaper than suppliers in other countries.

Earlier this year, Shell said it would refocus its investment on alternative energy on carbon capture and storage (CCS) and biofuels, and would not build any more wind farms. Voser explained that with an estimated1bn new cars on the road within the next 40 years, all types of cleaner technologies – including biofuels – would be needed. Many of those will also be powered by electricity generated by coal plants, which, in order to be truly green, needed CCS to bury their emissions.

Voser said that while he doubted that the Copenhagen climate change summit would result in a firm deal to replace Kyoto, he hoped that CCS would be accepted as a “mitigation technology” that developing countries would receive financial support to develop. “That is on the top of my wish list,” he said.

Like much of the industry, Shell is also going through a disruptive restructuring, which it has called Transition 2009 and will result in 5,000 people losing their jobs, many of them managers. The thousands of staff who are having to apply for the 15,000 new roles being advertised internally will find out in the next 10 days whether they have been successful, and Voser said yesterday that the process should be complete by January.

SOURCE ARTICLE

—–Original Message—–
From:   Deroche, Liz O MOTIVA-DMM/60
Sent:   Tuesday, November 24, 2009 7:18 AM
Subject:        Norco Personnel Announcement

Sent on behalf of Mark Hurley, General Manager – Norco Manufacturing Complex

The following Site Leadership Team role changes will go into effect January 1, 2010 and report directly to me:

Hermie Bundick has been selected as Site Production Manager for the Norco Manufacturing Complex.
Joe Gandolfo will be promoted Site Technical Assurance Engineering Manager for the Norco Manufacturing Complex. Joe has held a number of roles in his manufacturing management and manufacturing support leadership, most recently as the Director of Turnarounds – Manufacturing Americas.
Jones Devlin has been selected as Site Technical Assurance and Product Quality Manager for the Norco Manufacturing Complex.
Andre Bonton will be promoted to Site Projects and Turnaround Manager for the Norco Manufacturing Complex.
Lee Cheatham will be promoted to Site Maintenance Manager for the Norco Manufacturing Complex.
I have attached the new SLT organizational chart and we will discuss in more detail at a townhall in December.  I would also like to thank the Norco Site Leadership Team for their assistance during this important transition.  John Navratil, Tammy Little, Carla Davis-Madgett, and Jeff Brown moves will the subject of future announcements.

<<New SLT Org Chart.ZIP>>

Mark Hurley

Royal Dutch Shell CEO Peter Voser says falling carbon price is stifling investment. Photograph: Jim Watson/AFP/Getty Images

• Chief executive says falling carbon price stifling investment
• Call for government action to support new technology

Tim Webb
guardian.co.uk, Tuesday 24 November 2009 20.56 GMT

Shell’s new chief executive has called on governments to intervene in carbon markets, the first time the Anglo-Dutch oil company has acknowledged that markets cannot be left to set the price of pollution.

Peter Voser told the Guardian that action needed to be taken to make expensive green projects like carbon capture and storage (CCS) economically viable.

He cited the example of Shell’s CCS project in Australia where the government has introduced a carbon tax, or a minimum price of carbon. “That is a way of making sure it gets the support,” he said.

The Shell boss has become the latest and most high profile business leader to moot the idea of a tax, which is also receiving growing support from politicians in the UK and France ahead of the Copenhagen summit on climate change next month.

He said Shell, which until very recently had opposed any such government intervention in carbon markets, had revised its view based on its experiences of Europe’s emissions trading scheme. Companies wanting to build costly low carbon power plants complain that the price, which has slumped since the recession began, is too low to make them competitive.

As the Guardian revealed last month, the government’s Office of Nuclear Development has promised energy companies that ministers are prepared to set a minimum carbon price to make building new nuclear reactors economic. The UK could act in concert with other European countries next year.

Voser said that such government intervention would only be needed for a few years. Beyond that, the market should still be capable of setting the carbon price. “Over the long term the market should be capable of working out the CO₂ price,” he said, in one of his first interviews since taking the top job at Shell in the summer. “But I can see a scenario where in the first few years you have to intervene to get the market going. I should not be opposed to that.” He did not say where any minimum price should be set, describing the U-turn as a “refinement” “not a big change”.

Only last month, David Hone, Shell’s climate change adviser, echoed Shell’s long-standing position on carbon trading when he wrote to the Guardian to say Shell did not support governments setting a floor price within Europe’s trading scheme.

“This is a market based system and the market needs to be left to find the price that is required to deliver the necessary reductions to meet the clear environmental objective of the system,” he wrote. “Today, as a result of the financial crisis and a consequent reduction in emissions across the EU due to lower industrial activity, the market is telling us that it can meet the 2020 20% reduction objective at a price of around €15. We should respect this and allow the market to do its job.”

Voser said Britain and the rest of Europe was losing its leading position on developing CCS technology. “Europe had a leading position for some time but has slowed down on funding [being made available for projects]. Maybe they are losing their CCS leadership – we have conveyed that message to Brussels and the UK.”

A Greenpeace spokesman said: “Shell is accepting what everyone else has known for a long time – that you can’t rely on the European Union’s emissions trading scheme to deliver technologies like CCS, as pointed out by the likes of Lord Turner in his climate change report last year.”

SOURCE ARTICLE

FINANCIAL TIMES

Shell says $80 oil will halt debt spiral

Voser says more redundancies next year… (unspecified number)

By Ed Crooks in London

Published: November 24 2009 20:46

Royal Dutch Shell has signalled that the steep rise in its debts is coming to end, with its chief executive saying the group would not need to borrow any more money if oil remains at about $80 per barrel.

Shell has been cutting costs aggressively under Mr Voser: shedding 5,000 jobs this year, forcing staff to reapply for 15,000 posts, driving down suppliers’ prices , such as for drilling contractors, and shifting some procurement to China. Mr Voser said there would be an unspecified number of further redundancies next year…

Complete FT Article (Subscription)

However, Shell also said it was delaying the launch of Qatargas 4 by as much as 10 months, from the start of 2010 until the end of the year. Mr. Voser said the timetable had been disrupted by delays at other LNG projects in Qatar involving other big oil companies, such as Exxon Mobil Corp, Total SA and ConocoPhillips.

Daily Telegraph

Gas will be at the heart of Royal Dutch Shell’s production strategy ahead of oil as the world attempts to reduce carbon dioxide emissions, according to the energy group’s new chief executive, Peter Voser.

By Rowena Mason
Published: 8:17PM GMT 24 Nov 2009

Delivering an update on Shell’s two flagship gas projects in Qatar, which are costing the group $21bn (£12.6bn), Mr Voser admitted that one – a liquiefied natural gas (LNG) plant – would overrun by about 10 months.

However, he said construction was on track for Pearl, the other development, to start producing in 2011. It will be the world’s largest gas-to-liquids facility when completed, having spiralled in cost from $5bn to $19bn since 2003.

Both projects will lift Shell’s output by 10pc – or 350,000 barrels per day – and contribute $4bn per year in revenues. “Qatar is key to Shell’s revival,” one analyst from Deutsche Bank said.

Increased capital expenditure is part of a turnaround strategy implemented by Mr Voser that will also see Shell shed 5,000 jobs and ramp up production.

Despite Shell’s history as Europe’s largest oil company, Mr Voser made it clear that gas production would overtake oil production by 2012, as 1bn electric cars hit the world’s roads over the next few years. A few years ago, Shell’s production was split 60:40 in favour of oil.

The International Energy Agency has forecast a gas glut and depressed prices until 2015, but Mr Voser insisted the medium to long-term outlook for demand was strong.

“We are intensifying our gas production because clearly it is the fossil fuel that has the lowest carbon dioxide content,” he said. “We will be more than 50pc gas by 2012 and increasing afterwards.”

The company will add 1m barrels per day to capacity by the end of 2012 – a growth rate of 2pc. But Mr Voser said that while Shell was impressed by the Nigerian government’s efforts to ensure a ceasefire in the troubled Delta oil region, the company would no longer aim for growth in the area.

The chief executive said Alaska could be the “next big area” for oil producers, adding that Shell would deliver proposals to Russia for a major gas development in Yamal by next Spring and is still negotiating on the Kirkuk oil field with the Iraqi government.

He also emphasised the potential of carbon capture and storage technology as key to Shell’s strategy to mitigate emissions from fossil fuels.

Mr Voser ranked it as the most important issue to be discussed at the Copenhagen climate change summit next month, but warned that Europe and the UK are losing leadership in this area as a result of being slow to grant funding and subsidies.

He also admitted for the first time that Shell would accept a minimum price on carbon credits to incentivise investment in clean energy. He said it ought only to be used in the early years of a global system.

Related Articles

The great natural gas conundrum

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