Posts from ‘December, 2009’

BAGHDAD (Reuters) – A group led by Royal Dutch Shell, Europe’s largest oil company, signed a deal to develop Iraq’s Majnoon supergiant oilfield, pledging to spend tens of billions of dollars on the project over the next two decades.

Shell, along with Malaysia’s state-run Petronas, won the rights to Majnoon, a major prize near Iraq’s southern oil hub of Basra, in an energy auction earlier this month.

Mounir Bouaziz (above right), a vice president of Shell Gas and Power, and Abdul-Mahdy al-Ameedi, deputy director of the Iraqi Oil Ministry’s licensing office, signed the initial agreement in downtown Baghdad on Sunday.

It must now be sent to the cabinet for approval.

Bouaziz said the investment over the life of the 20-year deal would be “tens of billions” of dollars.

“When the cabinet give agreement to the contract, and the final contract is officially signed, we will start immediately. We know the area, and we have been coming to Basra for more than a year and a half,” he told reporters after the signing.

Shell is waiting for final approval of a natural gas deal also located in southern Iraq, which it will take on in partnership with Mitsubishi.

Then there is Exxon Mobil and Shell’s initial deal for West Qurna Phase One, a field left over from an initial bidding round that concluded in June. That field has reserves of an estimated 8.7 billion barrels.

Majnoon is even bigger. With a whopping 12.6 billion barrels, Majnoon is one of the world’s largest untapped fields.

Iraq is hoping a host of deals in the works will turn it into a major world energy player and increase output capacity to 12 million barrels a day (bpd) in six or seven years, putting it close on the heels of global leader Saudi Arabia.

Output now stands around 2.5 million bpd as the industry struggles to overcome the legacy of continuous war, sanctions and underinvestment over decades.

Oil officials have been in a triumphant mood since the December 11-12 auction, which awarded seven contracts to foreign firms.

For Majnoon, the Shell group proposed a per-barrel remuneration fee of $1.39 and pledged to increase output to 1.8 million bpd from a current production level of 45,900 bpd.

Shell has a 60 percent stake in the consortium, while Petronas holds 40 percent.

(Writing by Missy Ryan; editing by John Stonestreet)

REUTERS ARTICLE

RELATED ARTICLE:

Mounir Bouaziz, Shell VP for making deals with corrupt governments

It’s unclear how many of Shell’s 13,000 employees in Houston will be affected by the migration plans. Partly, that’s because company officials are still deciding which jobs will stay or go abroad, and are rolling out the plans in phases that run into next year. But at least a few divisions in Houston are preparing to be downsized dramatically.

The Sunday Times

Royal Dutch Shell, the oil giant, has launched a shake-up of its controversial operations in Nigeria by offering oilfields valued at up to $5 billion (£3.1 billion) for sale.

The auction comes as Nigeria prepares to impose harsher terms on foreign operators next month and hand greater control to domestic firms.

Shell is the biggest western oil firm in Nigeria, the world’s tenth largest producer, and has had operations there for 70 years.

It is understood that the company recently launched a formal sales process that is being overseen by Ann Pickard, head of Shell Nigeria.

“They have been talking about this for a while but it has now kicked off,” said a source close to the situation. “They are inviting proposals and circulating technical data on their fields.”

Shell’s decision to reduce its reliance on Nigeria, which was once its primary growth engine, signals a huge shift.

For decades it has been a mainstay of an industry that accounts for more than three-quarters of the Nigerian economy. It persisted despite rampant piracy and a long-running campaign of violence by militants against foreign workers.

The growing violence and a souring of relations with the government in recent years led the company to invest billions elsewhere to offset its dependence on the country.

With new projects in the Gulf of Mexico and Qatar near completion, it is understood that Peter Voser, Shell’s chief executive, is now keen to reduce its position in Nigeria.

Sinopec, one of China’s state-owned oil groups, has requested information. It is thought that indigenous companies such as Oando, Nigeria’s largest independent group, and London-listed Afren, could also pick up some fields.

Shell declined to comment but sources in talks with the company said the assets in question could be worth up to $5 billion. It is not selling its offshore blocks, which are less vulnerable and have more generous royalty terms.

Most of Shell’s fields are onshore and it is understood that the divestiture programme is focused primarily on those in the western part of the country. These include producing fields as well as undeveloped blocks and those now shut down because of the violence.

A further impetus has been provided by the end of long-term oilfield leases that were granted to Shell and other western rivals such as Exxon Mobil and Chevron. The leases, which have been in force for at least 20 years, were struck under the framework set out in the Petroleum Act of 1960. The Nigerian government is driving a hard bargain on renewal talks.

Adewale Tinubu, chief executive of Oando, said: “This has been a long time coming. The Petroleum Act was passed in 1960. It’s now almost 2010. It’s the biggest shake-up of the industry since Nigeria became independent.”

He added: “Shell will be the predominant seller. They have the widest footprint across the country and need to optimise the most.”

CNOOC, another Chinese state firm, recently offered $50 billion for a huge swathe of the country’s reserves. Some of these are still controlled by joint ventures between Nigeria’s national oil company and western partners.

Shell’s relationship with the Nigerians is fraught. It has filed dozens of lawsuits over pay disputes with the national oil company. Illegal tapping and sabotage of pipelines, meanwhile, has led to hundreds of thousands of barrels of crude being spilled into the environment.

Exxon and Chevron are believed to want to sell assets, while also bidding to renew rights to more desirable fields.

Shell’s decision is part of a company-wide shake-up. Since taking the helm in July, Voser has made 15,000 workers reapply for their jobs, re-entered Iraq and put a handful of European refineries up for sale.

• Shell negotiates funding solution in Nigeria

• Shell reports 58% profit fall on weak oil prices

TIMES ARTICLE

Sat Dec 19, 2009 1:51pm GMT

LAGOS, Dec 19 (Reuters) – Royal Dutch Shell (RDSa.L) said on Saturday it had no reports of attacks on facilities operated by its SPDC joint venture in Nigeria, following a claim by militants to have struck an oil pipeline overnight.

“At this time we don’t have reports of our facility being attacked,” a Shell spokesperson said. (For more Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ )

(Reporting by Nick Tattersall; editing by David Stamp)

© Thomson Reuters 2009 All rights reserved.

REUTERS ARTICLE

Makes us wonder here at Norco, when they are going to announce we have been sold. They are doing the Band-Aid approach painting things and fixing things that been needing it for a long time. No major repairs only those that you would do if you were going to sell your house.

FROM A SHELL INSIDER

John

Do you know how many VP’s there are now in Shell HR?

EIGHTY SIX…

All ruthless offspring sired by the windbag Hofmeister.

In the UK they would all be called FitzHR  or similar because most are bastards. (But a Fitz is a royal bastard I believe? )

POSTING BY A SHELL INSIDER: “JO BLOW”

The state of Accountability within Royal Swiss err.. I mean Dutch Shell

After the recent announcements concerning moving more of the finance functions to shared service centers in India and Manilla I thought now would be a perfect time to make a few points that are obvious to me.  If we all recall last May, the Board of Directors for RDS came under intense fire from shareholders on the disparity between executive pay packages versus performance.  Mr. Voser apparently heard the cry and began cutting fixed cost immediately, however the question remains whether his cost cutting will be effective and sustainable.  In my humble opinion all he has accomplished is short term cost reduction, I don’t see that he has fixed anything culturally that will translate to sustainable cost structure improvement.  At this point you may be saying “but Jo, these folks he got rid of are not coming back so that cost reduction is permanent”, and ordinarily I might be inclined to agree with you.  The fact of the matter is simple he did not hold the people accountable that created the bloated cost structure, he promoted them.  This does not really suprise me in the least because despite the corporate claims, Accountability for actions does not exist, I will qaulify this assertion with a few specific points.

What was Mr. Van der Veer given for his contribution to the state of Shell Oil today?  A big fat pay package that outraged share holders.

What happened to the brain trust that created the bloated cost structure Shell operates in today?  Massive IT projects that never delivered the promises of improved efficiency, Support sections like Finance and HR that are empires in themselves.  Shell Global Solutions, our own internal technology group that cost a business unit more to use then they lose by not inviting them in.  If you want to know where these folks are, just take a peek in EC-1 through EC-3, you will find them there.  I doubt that they have learned any valuable teachings about accountability.

Who was fired or disciplined for the poor performance of the Crude Expansion project at Port Arthur?  I can tell you that it was not the Venture Manager Forrest Lauher.  Under Lauher’s control the project budget escalated from a 7.2 billion dollar project to north of 10 billion, productivity in the field did not exist, the managing contractor had sufficient control of the project to work it as a schedule driven project instead of the cost driven project it had always been.  Where was Mr. Lauher during all this?  I would expect he was up at the Lake with his buddy Mr. Purves.  What happened to Mr. Lauher after the meltdown and re-organization of the project?  Well, He got him a nice little promotion to GM of Port Arthur Refinery instead of the pink slip that he deserved if held accountable for his poor management.

The vast majority of people that have been or will be let go as part of Transition 09 had nothing to do with creating the problems, but they are the people that will pay the price.  The jobs in finance and that will be migrated to India and Manila were not created by the employee filling the job, but by some executive.  Do you think that executive will be held accountable for his apparent bad decision to create a bloated finance section that cost to much to operate?  Until Shell makes meaningful changes to its culture at the top leadership levels the sustainability of cost improvement will not exist.

AMSTERDAM, Dec 18 (Reuters) – The Dutch NAM oil joint venture, owned by Royal Dutch Shell (RDSa.L) and Exxon Mobil (XOM.N), said on Friday it would postpone plans to drill three gas fields near an island off the coast of the Netherlands.

Maryland State Retirement and Pension System, Baltimore, divested more than 1 million shares of common stock valued at over $38.3 million and $3.5 million in bonds of Royal Dutch Shell and its affiliates because the company does business in Iran, the $31.8 billion system announced today.

NEW DELHI — Shell India Ltd. plans to expand “aggressively” as it keeps pace with accelerating fuel consumption in the world’s second-fastest-growing economy, Shell India Chairman Vikram Singh Mehta said Friday.