News and information on Royal Dutch Shell Plc.
Reuters) – The Middle East needs to solve the conundrum which sees it sitting on 40 percent of the world’s gas reserves and yet suffering from a supply shortage, a senior executive from Royal Dutch Shell (RDSa.L) said on Monday.
Click to continue reading “Shell says Middle East needs to solve “gas puzzle””
April 26 (Bloomberg) — Royal Dutch Shell Plc and Total SA are among energy producers shifting the balance of their production toward natural gas as oil-rich countries clamp down on access and deposits become easier to tap.
Click to continue reading “Shell, Total Step Up Reliance on Gas as Access to Oil Declines”
Tony Hayward, group chief executive of British Petroleum, made heads turn at the World Economic Forum in Davos, forecasting a “supply challenge” for the energy industry, which would have to increase output to 100mbd — a new peak for oil from the current capacities of 83-84 mbd. He was strongly backed by Mr Peter Voser, CEO of Royal Dutch Shell, who added to the scare stating that the industry would have to find up to $27 trillion to fund the investment in oil over the next 20 years.
Europe’s largest oil company by market value, Royal Dutch Shell Plc (RDSa.L) has said it plans to direct 60-70 percent of its investments into the industrialised countries of the Organisation for Economic Co-operation and Development (OECD).
Click to continue reading “Oil groups turn focus back to traditional fields”
The slick has now grown to about 1,500 sq kmThere are fears of an environmental disaster in the Gulf of Mexico, as efforts to clear up an oil spill have been suspended because of bad weather.
A drilling rig leased by the oil company BP exploded and sank off the Louisiana coast last week.
Some 1,000 barrels of oil a day are leaking into the sea from the damaged well, officials say.
They say the oil leak has the potential to damage beaches, barrier islands and wetlands across the coastline.
Eleven workers are still missing and presumed to have been killed in the accident. The search for them has been called off.
More than 100 other workers were rescued.
The Deepwater Horizon had been burning for 36 hours when it sank on Thursday in 5,000 ft (1,500m) of water, despite efforts to control the flames.
It was carrying out exploratory drilling 84km (52 miles) south-east of Venice, Louisiana when the blast occurred.
‘Highly complex task’
Bad weather caused cleanup efforts to be suspended over the weekend, allowing the slick to grow to about 580 sq miles (1,500 sq km), officials say.
Oil leaks from a sunken drill pipe 5,000 ft beneath the ocean surface
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BP has been using a robot submarine to try to activate a blowout preventer – a series of pipes and valves that could stop the leak.
However, this was a “highly complex task” and “it may not be successful”, chief operating officer of BP’s exploration and production unit Doug Suttles was quoted as saying by Reuters.
The company has also brought in more than 30 cleanup vessels and several aircraft to spray dispersant on the floating oil.
At the moment, the weather conditions are keeping the oil away from the coastline and it is hoped the waves will break up the heavy crude oil, allowing it to harden and sink back to the ocean floor.
Oil platform blaze off Louisiana
‘Number one priority’
The coastguard earlier said it had thought it was dealing only with a surface residual oil spill from the rig.
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“In addition to that, is oil emanating from the well. It is a big change from yesterday… This is a very serious spill, absolutely, ” said Rear Adm Mary Landry.
In 2009, BP PLC was fined a record $87m for failing to improve safety conditions following a massive explosion that killed 15 people at its Texas City refinery.
But the US Mineral Management Services found no violations on the Deepwater Horizon rig when it carried out routine inspections in February, March and April this year.
President Barack Obama said on Thursday that the government was providing “all assistance needed” for both the rescue and clean up efforts in the troubled area.
He described the crisis on the BP-leased rig as his administration’s “number one priority”.
No cause for the blast has yet been identified.
How Royal Dutch Shell saved Hitler and the Nazi Party. Same motive then, as for Shell dealing with the terrorist Gaddafi, the corrupt Saudi regime and the fanatical Iranian mullahs now: access to oil. We have gathered much more evidence of Shell’s evil relationship with the Nazi.
The Sunday Telegraph: BP is expected to say this week that profits almost doubled in the first quarter, as it investigates the circumstances surrounding the explosion of a drilling rig it had hired in the Gulf of Mexico.
Click to continue reading “Rig blast shadows rise in BP profits”
Oil is leaking from a damaged well feeding a rig that sank off Louisiana on Thursday, in what US officials are calling “a very serious spill”.
The well is estimated to be leaking at a rate of about 1,000 barrels (42,000 gallons) of oil per day.
Although the US coastguard said on Friday that no leak was detected, the latest evidence suggests a spill. Bad weather has hampered efforts to fix it.
Eleven workers are still missing after an explosion and fire on Tuesday.
The Deepwater Horizon had been burning for 36 hours when it sank on Thursday in 5,000 ft (1,500m) of water, despite efforts to control the flames.
It was carrying out exploratory drilling 84km (52 miles) south-east of the Louisiana port of Venice when the blast occurred.
BP has deployed a number of ships and equipment to contain the leak by closing valves on the sunken well.
“A huge number of engineers from ourselves, working with [the government] and across the industry are putting together the best technology and know-how to solve this problem,” BP Exploration and Production Chief Operating Officer Doug Suttles was quoted by the Associated Press news agency as saying.
Oil sheen
The US Coastguard said it had thought it was dealing only with a surface residual oil spill from the rig.
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“In addition to that, is oil emanating from the well. It is a big change from yesterday… This is a very serious spill, absolutely, ” said Rear Adm Mary Landry.
A sheen of oil covering an area of about 20 square miles was visible on the ocean’s surface after the explosion and subsequent blaze.
In 2009, BP PLC was fined a record $87m for failing to improve safety conditions following a massive explosion that killed 15 people at its Texas City refinery.
But the US Mineral Management Services found no violations on the Deepwater Horizon rig when it carried out routine inspections in February, March and April this year.
President Barack Obama said on Thursday that the government was providing “all assistance needed” for both the rescue and clean up efforts in the troubled area.
He described the crisis on the BP-leased rig as his administration’s “number one priority”.
No cause for the blast has yet been identified.
Paralegals Field Fisher Waterhouse are looking for people who worked at the Shell Oil Refinery in Heysham, Morecambe, from around 1945 to 1960.
“We are investigating a possible claim relating to asbestos exposure for a family,” they tell us. “Any help or information would be very much appreciated.
“Please contact Rose on 020 78 614 624 or rose.johnston@ffw.com“.
The Shell Oil Refinery covered much of South Heysham: some holiday makers at Ocean Edge Caravan Park remember it for its “eggy smell”.
A couple of decades ago Shell had five refineries in the United Kingdom – when the sale of Stanlow is completed soon they will have none. Is this because refining is a sunset industry with no growth potential and no chance of earning returns? Not if you take note of reliable global demand forecasts it isn’t. The “US Joint Forces Command” – the top of the American armed forces pyramid – has recently said that globally a “severe energy crunch is inevitable without massive expansion of production and refining capacity”. Most other forecasters agree that the planet will need substantially more not less refining capability in the years ahead. So why has Shell retreated so dramatically from refining and what are the implications for the “new Shell” which will emerge from the radical reviews underway under Peter Voser?
Historically Shell has been pretty good at running refineries. Many of the advanced processing techniques that are commonplace in sophisticated refineries are Shell inventions or incorporate propriety Shell technologies. The challenge to extract the maximum amount of distillates and gasoline from crude oils of a variety of chemical complexity was one that Shell embraced many years ago and their success record is impressive. Even the heaviest and most unpromising crudes can be forced to deliver high spec white oils these days – it’s almost taken for granted that they will. Similarly Shell refineries are hugely more energy efficient than they used to be. The amount of energy used in processing crude is orders of magnitude less today than it was even ten years ago. Similarly although there are safety and environmental failures that Shell prefers not to talk about (ask the inhabitants of Durban South Africa for example) overall the refinery HSE record is a good one – perhaps the best amongst the oil majors.
So if refining is historically a core competence in Shell, if the demand for refinery capacity is on the increase not the reverse and if Shell’s general track record is a good one why are they running away from this sector at such a rate? The reason is that there is a fallacy in Shell as to what refineries actually are! They are seen as profit centres rather that the cost centres that they really are. The economics of a refinery are comparatively simple. Crude oil arrives, it is processed and then products cross the refinery fence. The cost of the crude oil is not the refiners concern and the value realised for the products is not their concern either. Crude is bought by the traders and products are sold by the traders and marketers. The refiner’s challenge is to process what the traders give them and supply what the marketers ask for as cheaply as possible. But in order to do this it requires a management imperative which sees that it is worthwhile being involved in this business at all. In the past vertical integration was seen to add value all the way along the supply chain – from wellhead to the motorist’s car if you like. This is no longer the case and every business has to deliver individual returns. The traders buy the right crude at the right prices and the marketers and traders sell the right products and achieve the maximum returns that they can. The poor refiner is squeezed in the middle and however well he runs his operation it will always be under scrutiny. This is particularly so as refineries are still quite labour intensive operations. Shell has around a thousand employees at Stanlow and there are hoards of contractors on top of that. In an obsessively cost conscious environment such as the one that rules in Shell at the moment all labour-intensive sectors are at risk –irrespective of their intrinsic value or their competence – or even the likely long-term demand for their products and services.
ARTICLE ENDS
Adoption of rapid results as a business aim. Short-termism involves maximizing profits in the near future, possibly by raising profits to the highest level and cutting costs by laying off staff. The pressures of maximizing shareholder value often lead to the adoption of a short-term approach, regardless of whether this is in the company’s long-term interests.
The modern refinery as Wilt points out is caught somewhat in the middle of a complex situation. At times the refinery functions as a profit center, at others a cost center. This fluctuation is driven by the pace with which the spread between raw crude prices and finished product prices rise and fall, and is further influenced by the given refinery complexity and efficiency along with grade of crude oil it is able to refine. There are many more variables at play, but the above mentioned represent the largest and most important. I will illustrate in simple math below.
42 gallon barrel of oil @ 80$ a barrel = $1.90 per gallon of raw crude processed.
Assuming a refinery capability of 95% conversion to value product. this translates to roughly 40 gallons of product to be sold. Assuming that the average cost of all product streams to the consumer is around $2.75 per gallon for ease of illustration.
So as you see with these assumptions you basically have a spread of $30.00 a barrel processed. Now you have to take out your cost to process, the marketers cut on the finished product side, the retailers cut, any transportation costs etc. Under this assumption that leaves somewhere around a net gain of $8-$12 bucks in the refiners pocket depending on the variables mentioned above.
Now, without a refinery, there is no need to drill for nor produce oil! Oil in its virgin state has no value, the value is derived from the products that can be produced from the raw material. It is for this reason that a total exodus from downstream is short sighted. Shell should be focused on reducing costs, and maximizing yields to position itself to benefit from margin rich environments, and minimize loss during margin poor environments. This would be the appropriate long term approach in the downstream business.
Regards,
Jo Blow
Thanks for this Jo Blow – some very helpful additions to my original post. I am an enthusiast for the hiving off of Shell’s global marketing business into a separate Shell-branded company. I’m a tad ambivalent about whether there would be merit in including the refineries in this or not. If not then maybe Shell could create a third company to run refineries? If others (independents) can do this profitably (they obviously can) then why not create a “Shell Refining Inc.” ?
: It appears that Voser finally got fed up with Mr Overpromise/Underdelivery. Despite all the nice words about him, he is clearly kicked out. Plenty of sycophants around him are now fearing for their jobs and positioning themselves whom to kow-tow now. This bearded fellow wasted his great brain on very small details and he was unable to delegate. I think his only real good project was the SLIM project. This was many moons ago and launched him to the top jobs. And there he failed as frequently and eloquently pointed out on the Donovan site. Big brain, a micromanager on par with the pointy haired boss in Dilbert, a vicious and vindictive attitude to those that were of no use to him or that might talk back. In summary: Good riddance and now the legal system of Scotland can go after him. But I doubt they will.
: What goes around comes around.... The announcement of Brinded has long been anticipated. We now wait for the next much smaller announcement.... Tom Purves to retire..... This will make our day when that moment happens. Shell never deals with the issue of bad leadership until it is too late and the havoc has been wreaked.... However, as we say in the US, Every dog has its day..... and today that was Malcolm.
: So early retirement then after all that ....... REPLY BY JOHN D. You are still playing a point scoring game. You seem to forget that the avoidable deaths of Shell offshore workers on Brent Bravo is at the heart of this matter. The deaths occurred after a safety audit led by Bill Campbell exposed a shambolic, illegal and shameful safety regime on Brent Bravo. They occurred after Shell senior Expro management had promised Bill that Shell would bring an end to the "Touch F*** All" culture and the falsification of safety records. The explosion and record breaking fine provide proof that the promises were not kept. There is NO commercial aspect to this matter as far as Mr Campbell is concerned. He is driven solely by a fear of an even worse event due to the same policy by Shell of putting production and profits before the safety of offshore workers. Please give Bill some credit for his integrity and for his long campaign, which has rightly received cross-party support from many MP's.
: Agent provocateur indeed!! Never been called that before, and I am most certainly not in league with Shell in any way! I again reiterate my point : was Campbell fired or given early retirement from Shell and thereby lies his grudge or did he reach full retirement age in the company? An honest answer might convince many that his continuous aggressiveness against Shell is genuine or just an ongoing grudge. This is not a "slanging match" merely a point of clarification. REPLY BY JOHN DONOVAN: Mr Campbell has made it clear that he does not wish to get into discussion with someone making insulting comments while hiding behind an alias. With regards to his comment that you may be an agent provocateur, perhaps he gained that impression from checking your history of postings. Just so there is no misunderstanding, we welcome contributors who provide a counter-balance to negative postings about Shell. I have provided some links to further information about the Brent Bravo scandal. Despite all of the promises by Shell senior management about safety, which including appointing a safety Czar, its track record remains atrocious. Years after the Brent Bravo debacle, it was revealed that the lifeboats for a Shell North Sea platform were not seaworthy. You could not make it up. “Lifeboats trouble at Brent field” published on 14 March 2008, UpstreamOnline revealed “SHELL’s safety record on its Brent Bravo platform in the UK Northern North Sea is once again under scrutiny after the discovery of technical problems with two lifeboats on the installation that resulted in both of them being removed from service.” Jake Molloy, general secretary of the Offshore Industry Liaison Committee was quoted in the article by Christopher Hopson as claiming “If they had loaded up this particular lifeboat, the chances are it could have been launched into the sea in an uncontrolled fashion which would have caused death or injury as it was held in place by corrosion and not by the designed system”. The article said that problems had been found with a second lifeboat on the Brent Bravo platform. It also reported that a lifeboat had launched itself into the sea from Shell’s Tern platform because the brakes and clutches were “dysfunctional” and had damaged the launch mechanism off the platform. Shell confirmed problems had been discovered with two lifeboats on Brent Bravo during “routine maintenance”. Shell was quoted as stating that it viewed the matter seriously and had “mobilised an investigation team on the platform”. BILL CAMPBELL EMAIL SENT TO MEMBERS OF THE UK HOUSES OF PARLIAMENT ROYAL DUTCH SHELL SAFETY CONCERNS
: LondonLad: In many cases "Reaching Retirement age" in Shell simply means being unable to find a position outside Shell -nowadays the most competent people generally move on long before reaching retirement age and pursue a second career elsewhere.
: To : an observer of Shell, you state "It is commonly known that a great many employees of Shell Expro are freemasons". Where did you get this "fact" from - smoking whacky backy?? I doubt very much that a great many are indeed freemasons. Even if they are (wich I seriously doubt), so what? Let's face it they are a society that provide one of the largest contributions to charities in the UK. I think you very clearly have an axe to grind against Shell. In that context why does Campbell have such a chip on his shoulder over Shell? Was he sacked for some reason? Did he actually reach his retirement age in Shell? Would be nice to know so that we can believe more that his rants are genuine problems he has with Shell rather than caused by some hidden grudge.
: GTW, I know you are right, TP and others will get their due. What is painful is that those whose lives have been changed and whose spirits have been destroyed because of his actions, will not be compensated. Tom is not the only one taking credit for this new cruel process of forced ranking, by claiming credit for what market demand has meant for profits. There are promotions taking place right now because credit is claimed by those executing Tom's plan for performance 'refirings'. I worked in manufacturing sites where management and performance was a joke, and profits were above forecast. It's always been market demand and the hard work of the folks on the ground that make manufacturing successful, Tom is not a pioneer in taking undue credit for local successes, but he has certainly been the cruelest!
: I have no proof nor will I ever find that proof, but this reprehensible conduct of the legal authorities smells to high heaven of masonic lodges. It is commonly known that a great many employees of Shell Expro are freemasons. The police forces all over the world are well presented in the various lodges. I would not be surprised if Brinded himself is a member. Bill Campbell is a very courageous man taking on these evil forces. We in Shell all knew him to be a completely honest and competent Maintenance manager and HSE auditor. But he loses against all the parasites and sycophants whose sole job is to protect the directors. And then live well on the spoils of their abhorrent activities. Top marks for the Donovans who keep this festering sore in the spotlight. To some it maybe a lot of repeating old stories, but those that want to hide and bury their bad actions know that time is on their side. And Shell has deep pockets and knows how to procrastinate.
: John, there is no issue with my post. This is the same GTW that has been providing updates for some time on the ill fated project CEP and the ill fated Tom Purves, both of which should be going fading into the background this year as old worn out news.
: I retract my previous statement. COMMENT BY JOHN DONOVAN: WE HAVE REASON TO SUSPECT THAT THIS POSTING IS NOT IN FACT FROM THE PARTY WHO USES THE ALIAS "GOLDENTRIANGLE WATCHMAN ON THIS BLOG, BUT IS FROM AN IMPOSTER.
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