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Posts on ‘March 16th, 2010’

Shell to cut a further 1,000 jobs

Shell is to cut a further 1,000 jobs. Photograph: Graham Turner home

Royal Dutch Shell announced a further 1,000 job cuts today as the Anglo-Dutch firm admitted it had been slow to respond to the global slump.

The oil group, which has 100,000 staff worldwide, cut 5,000 posts last year and had already announced a further 1,000 job losses for this year.

Chief executive Peter Voser said the group would axe another 1,000 posts by the end of 2011 as he presented his strategic update for the firm.

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Fishermen ‘right to be concerned about mercury’

SHELL is working on a submission for the Environmental Protection Agency (EPA) regarding the discharge of water which will be separated from the gas, writes Marian Harrison. The company agreed with fishermen not to discharge the treated water into the Sruwaddacon Bay and are investigating alternative options before seeking permission from the EPA.

More Shell job cuts – 7,000 announced under Voser

Times Online

// March 16, 2010

Comment: cracking Shell

Robin Pagnamenta

After seven years of year-on-year declines in oil production, Shell’s return to volume growth represents a significant turnaround for the Anglo-Dutch oil giant.

For Peter Voser, eight months in to his role as chief executive, it also reflects a new phase in the drive to rebuild the company’s fortunes.

Since his appointment last summer, he has announced plans to cut 6,000 jobs and reorganise the group to strip out costs and excessive bureaucracy.

Today he announced plans to intensify that drive by trimming a further 1,000 positions, mostly in middle management and the group’s downstream operation.

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Shell Ireland Corrib Gas Project Startup Delayed To ’12-’13


MARCH 16, 2010 By Lananh Nguyen Of Dow Jones Newswires

LONDON (Dow Jones)–The startup of Royal Dutch Shell PLC’s (RDSB) Corrib gas project off the west coast of Ireland will be delayed to 2012-2013, the company said Tuesday in a strategy update.

The project was originally set to come online between 2010-2011, but has been held up. Shell was asked by Ireland’s planning board in late 2009 to consider an alternative route for a nine-kilometer onshore pipeline to deliver gas from its Corrib fields to a processing terminal in response to local opposition.

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Rather than a fire sale, Shell may close refineries


Shell: Refinery Sales Could Be Stalled By Potential Essar IPO

By Lananh Nguyen Of DOW JONES NEWSWIRES MARCH 16, 2010, 12:33 P.M. ET

LONDON (Dow Jones)–India’s Essar Oil Ltd.’s (500134.BY) potential London listing could stall the company’s negotiations to buy three European refineries from Royal Dutch Shell PLC (RDSB), Shell’s Chief Financial Officer Simon Henry said Tuesday.

“While those negotiations [for an initial public offering] are going on, it’s very difficult for them to go forward,” with the purchase of the Heide and Harburg refineries in Germany and the Stanlow plant in the U.K., but the companies are still in talks, Henry said at a Shell strategy update in London.

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Shell Pays CEO Voser $4.4M, Ex-Exec Linda Cook Gets $7.6M Severance


MARCH 16, 2010, 6:47 A.M. ET By Lananh Nguyen and Jeffrey Sparshott Of Dow Jones Newswires

LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSB) said Tuesday it made a $7.6 million severance payment to the former head of its gas and power division last year, making her the highest-earning executive at the Anglo-Dutch oil major in 2009.

Linda Cook resigned as an executive director of the company on June 1, soon after Shell appointed Peter Voser as chief executive. Cook, one of the most senior women in the global oil industry, was a top contender for the post and had worked for Shell for 29 years.

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Shell to boost production, cut more jobs

Associated Press,  03.16.10, 05:46 AM EDT

AMSTERDAM — Royal Dutch Shell PLC says it will boost production by 11 percent by 2012 from 2009 levels, slightly more than previously forecast, and sell assets and cut more jobs.

The targeted output rise, to 3.5 million barrels of oil per day, would reverse a decade of production declines at Europe’s largest oil company.

CEO Peter Voser will update investors on strategic plans later Tuesday. In a statement, Shell says it plans up to $3 billion in annual asset sales in coming years, disposing 15 percent of its refining capacity. It expects up to $30 billion per year in capital expenditures.

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Shell CEO’s Pay Rose 22% in 2009



MARCH 16, 2010

LONDON—Royal Dutch Shell PLC’s Chief Executive Peter Voser’s earnings rose 22% in 2009 to $4.4 million, according to the company’s annual report Tuesday.

Mr. Voser, who became CEO in July 2009, earned $3.6 million in 2008 while serving as the company’s chief financial officer. The earnings include Mr. Voser’s salary and performance bonus.

Shell proposed in February changes to how it pays its executive directors in an attempt to assuage concerns that led shareholders to reject its remuneration package last year.

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Royal Dutch Shell Plc Updates on Strategy to Improve Performance and to Grow

– Shell (NYSE: RDS.A) (NYSE: RDS.B) today said it was entering a new period of growth, and outlined plans to sharpen up performance and reduce  costs.

– Upstream production is expected to reach 3.5 million barrels of oil equivalent per day (mboe/d) in 2012, an increase of 11% from 2009.

– In addition, the company is assessing over 35 new projects from some 8 billion barrels of oil equivalent resources (boe), which should underpin Upstream growth to 2020.

– Downstream continues to focus on profitability, with plans to exit 15% of refining capacity and 35% of retail markets, and growth investment to enhance the quality of manufacturing and marketing portfolios.

– As new projects come on stream, the company expects cash flow from operations will increase by around 50% from 2009 to 2012 in a $60/bbl oil price world, and by over 80% with $80/bbl oil prices.

CEO Peter Voser (above right) commented: “These are exciting times for Shell. We are poised to deliver a new wave of financial and production growth. We are making substantial investments in new projects to drive Shell’s financial performance going forward. Shell should be in a surplus cash flow position in 2012, after capital investment and dividend payments, assuming $60 oil prices and a more normal environment for natural gas prices and downstream.”

Voser continued: “We are moving into a delivery window across the next five years, and beyond that, we have a tremendous opportunity set for the 2015-2020 timeframe. We will put the emphasis on financial performance – cash generation and returns.

Upstream, we have built up strong foundations in activities like gas-to-liquids (GTL), oil sands and liquefied natural gas (LNG). Looking out to 2020, I expect Shell’s exploration to underpin new upstream growth, especially in North America and Australia, with additional barrels from development-led projects. Downstream, we are making substantial investments in new refining and petrochemicals capacity. Once these projects are on stream, I expect the downstream growth emphasis will switch to further strengthening our marketing for the next several years.”

Peter Voser mapped out three distinct layers for Shell’s strategy development: nearer-term performance focus, medium-term growth delivery, and maturing next generation project options.


    - Continuous improvements in operating performance, with an emphasis on
      safety, asset performance and operating costs, including firm plans
      for $1 billion of cost savings in 2010, and staff reduction of some
      2,000 positions by end-2011.

    - Asset sales of $1-3 billion/year as Shell exits from non-core positions
      across the company.

    - New initiatives expected to improve on Shell's industry-leading
      Downstream by focusing on the most profitable positions and growth
      potential. Shell has plans to exit from 15% of its world-wide refining
      capacity, 35% of the company's current retail markets, and is taking
      steps to further improve its chemicals assets.


    - Shell has some 11 billion boe of new oil & gas resources under
      construction, and selective downstream growth opportunities. This is
      one of the most ambitious investment programmes in the industry.

    - Net capital investment is expected to be $25-$27 billion/year for
      2011-14, with up to $3 billion/year of asset sales, and $25-$30
      billion/year of organic investment. Annual spending will be driven by
      the timing of investment decisions and the near-term macro outlook as
      Shell invests for long-term growth.

    - Cash flow from operations excluding net working capital movements was
      $24 billion in 2009. Shell expects cash flow to grow by around 50%
      from 2009-2012 assuming a $60 oil price and a more normal environment
      for natural gas prices and downstream margins. In an $80 world, 2012
      cash flow should be at least 80% higher than 2009 levels.

    - Downstream, Shell is adding new chemicals capacity in Singapore and
      refining capacity in the US, and making selective growth investment in

    - Oil & gas production is expected to average 3.5 million boe/d in 2012,
      compared to 3.15 million boe/d in 2009, an increase of 11%, in line
      with previous guidance of 2-3% average annual growth rates, and with
      confidence in further growth beyond 2012.

    - As a result of its growth investment, Shell made proved reserves
      additions of 3.4 billion boe in 2009. With 2009 production of 1.2
      billion boe, this resulted in a Reserve Replacement Ratio of 288%, and
      a total proved reserves to production ratio of ~12 years.


    - Shell has built up a substantial portfolio of options for the next wave
      of growth in the company. This portfolio has been designed to capture
      price upside, and minimize the company's exposure to industry
      challenges from cost inflation and political risk.

    - Exploration delivered 2.4 billion boe of new resources in 2009,
      including new barrels in the Gulf of Mexico, North America tight gas,
      and Australia. This was the best year for exploration in a decade.

    - In North America, Shell has made great progress with tight gas, adding
      8 trillion cubic feet equivalent (tcfe) of resources in 2009, bringing
      the company's total to 21 tcfe (3.7 billion boe). Tight gas production
      increased by over 60% in 2009 to 110,000 boe/d, with potential for
      >400,000 boe/d from today's portfolio.

    - In the Gulf of Mexico, the company has established at least three new
      production hubs, at Vito, Stones and in the Mars area, with >150,000
      boe/d production potential for Shell.

    - Australia should underpin Shell's next tranche of LNG developments,
      within a world-wide options set for a possible further 10 million
      tonnes per year (mtpa) of capacity by 2020, which could take Shell's
      total capacity to ~35 mtpa.

    - In Canada, we retain options for further heavy oil expansion, with the
      nearer-term priority on improving operating efficiency and facilities

    - Shell's pre-FID option set for fields that could come on stream by 2020
      has reached 8 billion boe of resources, with over 35 substantial new
      projects that can sustain growth to 2020.

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Shell proved reserves climb on SEC rule change

By Steve Goldstein

LONDON (MarketWatch) — Royal Dutch Shell in its annual report, said proved oil and gas reserves rose to 14.13 billion barrels of oil equivalent from 10.9 billion in 2008. Shell said the 2009 volumes were established under new SEC rules on oil and gas reporting. The report said 4.42 billion barrels were added before accounting for production. As for compensation, the report showed Linda Cook received a $7.6 million severance and a performance bonus of $1.54 million after leaving as head of the gas and power business. Peter Voser’s total compensation was $4.39 million, Malcolm Brinded earned $3.69 million and Simon Henry earned $1.49 million in 2009.

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Shell eyes return to growth

Reuters UK

Tue Mar 16, 2010 8:20am GMT

LONDON (Reuters) – Royal Dutch Shell Plc (RDSa.L) said it was planning a return to robust growth in oil and gas production after years of decline, as it unveiled strong reserves additions that would underpin longer term growth. Europe’s largest oil company by market value said it is targeting output of 3.5 million barrels of oil equivalent per day (boepd) in 2012, up from 3.15 million in 2009 — equivalent to an annual growth rate of 3.5 percent.

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Shell may have to raise bid for Arrow Energy

A stream of analyst comments and silence on the offer from the Australian coal-seam gas group has fuelled expectations that Arrow will reject the bid and the two parties will have to come in with a higher – and hostile – offer. Last week, Shell and PetroChina offered A$4.45 in cash for each Arrow share, plus a share in a new, international Arrow entity.

Dirty Oil

Financial Times

Co-op backs oil sands awareness campaign

By Ed Crooks, Energy Editor

Published: March 15 2010 22:32

The Co-op is backing Dirty Oil, a new documentary that had its premiere in London on Monday night.

The film alleges pollution from oil sands production is contributing to high rates of cancer among local communities; a claim that is rejected by the industry.

The Co-op has put £100,000 towards marketing and distribution of the documentary in Britain. Its asset management arm is part of a campaign against oil sands investment by Royal Dutch Shell and BP.

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So far so good as Shell is giving a shaking

Times Online

March 16, 2010

David Wighton: Business Editor’s commentary

He arrived with a bang and within weeks had axed 5,000 jobs. But eight months after taking over the helm at Royal Dutch Shell, is Peter Voser making progress turning around the supertanker?

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