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Posts from ‘May, 2010’

Shell adds precautions for Arctic drilling

latimes.com

The oil company says it will have a containment dome, submersible vehicle and divers at its drilling site.

By Kim Murphy, Los Angeles Times Reporting from SeattleMay 18, 2010

Facing last-minute questions over its plan to launch exploratory oil drilling in the Arctic Ocean, Shell Oil Co. pledged Monday to deploy a prefabricated coffer dam ready for “immediate” use in the event of a blowout, with a full-scale oil spill response within an hour.

In a letter intended to reassure federal officials that offshore drilling can safely begin in the fragile Arctic in July despite the spill in the Gulf of Mexico, Shell said it also would be ready to apply dispersant immediately underwater near the source of any oil flow and would have a remotely operated submersible and trained divers at the drilling site.

A 100-ton containment dome was deployed over the Gulf of Mexico leak, but it was abandoned when it became clogged with ice-like crystallized methane gas. Shell said its coffer dam would “take into consideration” the problems BP experienced and presumably provide a workable containment method.

“Shell is committed to undertaking a safe and environmentally responsible exploration program in the Chukchi Sea and Beaufort Sea in 2010,” Shell President Marvin E. Odum said in a letter to the federal Minerals Management Service, dated Friday but made public Monday. “I am confident that we are ready to conduct the … program safely, and, I want to be clear, the accountability for this program rests with Shell.”

After the BP disaster off the coast of Louisiana, federal officials asked Shell for additional information about its oil spill prevention and response plans, especially since a spill in the remote Chukchi and Beaufort seas could have devastating consequences on the delicate Arctic ecosystem.

Critics say no full-fledged oil spill cleanup drills have been conducted in the Chukchi, where Shell will be relying on a fleet of response vessels accompanying the drilling rig and other equipment stationed at the remote village of Wainwright, Alaska, and elsewhere on the North Slope.

Marilyn Heiman, U.S. Arctic program director for the Pew Environment Group, said cleanup plans described in Shell’s letter still seem insufficient.

“They do not begin to have enough vessels and equipment and people. If they did have a spill that lasted more than a couple weeks and had to fly stuff in, there are no runways. There’s only a boat ramp at Wainwright; there’s no boat dock there,” she said.

Shell emphasized in its letter that the chances of a blowout are far less than at the BP spill in the Gulf of Mexico, which occurred in waters 5,000 feet deep. That well encountered pressures two to three times greater than Shell expects in Alaska, the company said, where it will drill in about 150 feet of water.

Shell also has enhanced its blowout prevention equipment — the apparent failure of which contributed to the BP spill. Shell said its devices would be tested weekly instead of every 14 days — as it had originally proposed — and the blowout preventers could be manually operated if necessary.

kim.murphy@latimes.com

Copyright © 2010, The Los Angeles Times

LA TIMES ARTICLE

Shell faces shareholder questions on tar sands

The Independent

By Sarah Arnott

Tuesday, 18 May 2010

Shell will become the latest major corporation to face investor questions about tar sands developments at its annual general meeting (AGM) today.

Demonstrations outside the meeting in The Hague will be calling for an end to tar sands exploitation, while inside the hall the Anglo-Dutch group’s executives will be quizzed by shareholders on the financial risks.

Some 142 investors have backed a special resolution calling on Shell to give more details on the financial, environmental and human rights risks of tar sand, which make up a third of the major’s resource portfolio.

The responsible investment charity FairPensions, which co-ordinated the action, was behind a similar special resolution put to rival BP’s AGM last month, garnering support or abstention from 15 per cent of voting shareholders. Royal Bank of Scotland has also come under pressure from environmental groups for underwriting tar sands projects.

Shell has already responded to the tabling of the resolution, engaging in a “sustained dialogue” with shareholders about the risk assumptions of its tar sands plans, according to FairPensions. But investors want more.

So far Shell’s tar sand projects, at Athabasca in Canada, involve open cast mining. But the majority of its undeveloped resources will require the more controversial “in situ” method, where steam is injected down deeply drilled wells to boil the bitumen out of the ground. The technique leaves less of an immediate scar on the landscape, but has a much higher carbon footprint because it is so much more energy intensive.

Shell is tight-lipped about the in situ projects and investors backing the resolution are calling for “substantive disclosures” on the plans.

The resolution will be formally proposed today by the Co-operative Asset Management. “Oil and gas companies go to extraordinary lengths – and endure formidable risks – to satisfy our demand for a fuel [which] must diminish if we are to stay within acceptable levels of global temperature increase,” Niall O’Shea, the group’s head of responsible investing, said. “We appreciate Shell’s willingness to enter into dialogue and we agree there are no perfect solutions – but continued success as a company will depend on the providence of their investments.”

The campaigners hope the sight of BP still battling the oil spill in the Gulf of Mexico will underline their concerns about the financial risk of unconventional oil. “The Gulf of Mexico spill has proved that environmental and social risks are also financial risks, and has made the need for shareholders to carefully scrutinise the risk management strategies of oil majors abundantly clear,” Catherine Howarth, the chief executive of FairPensions, said. “Shell’s AGM will provide one of the first opportunities for investors to act on this responsibility.”

SOURCE ARTICLE

Royal Dutch Shell is hit by news hoax

Times Online

The Times May 18, 2010
Robin Pagnamenta

Royal Dutch Shell became the victim of an elaborate internet hoax yesterday after a fake news release was circulated about its operations in Nigeria.

The bogus e-mail, which featured a Shell logo, links to company websites and cautionary footnotes, claimed that the company planned to suspend deepwater drilling off the coast of Nigeria.

The e-mail invited journalists to call a telephone number, which was answered by hoaxers who claimed to work for “Shell media relations” and who claimed that the decision had been taken after pressure from campaign groups such as Amnesty International.

A spokesman for Shell, which holds its annual meeting in The Hague today, said that it was investigating the incident.

It is the second time in four months that Shell has been the victim of an internet-based threat to its security linked to its activities in Nigeria. In February, Shell launched an inquiry after personal details of 170,000 employees and contractors appeared on the internet. The list included names, phone numbers and other details of employees and contractors working for Shell worldwide and was sent to non-governmental organisations and an anti-Shell website in an apparent attempt to highlight Shell’s activities in Nigeria and to call for changes to company policy there.

Shell is set to face fresh pressure over its activities in Nigeria at its annual meeting.

Friends of the Earth Netherlands and four Nigerians are also planning to sue the group over oil spills in Nigeria.

Also in focus at the annual meeting will be Shell’s activities in the Canadian oil sands, against which Shell investors and environmental campaigners are launching a protest today.

Catherine Howarth, chief executive of FairPensions, said: “The Gulf of Mexico oil spill has proved that environmental and social risks are also financial risks, and has made the need for shareholders to carefully scrutinise the risk-management strategies of oil majors abundantly clear.

“Shell’s AGM will provide one of the first opportunities for investors to act on this responsibility for closer scrutiny, and we hope that, at the meeting and beyond, investors continue to press Shell and other companies to demonstrate that everything possible is being done to identify and mitigate the risks arising from tar sands extraction.”

However, the clampdown on offshore drilling after the Gulf of Mexico oil spill is set to channel investment into the controversial oil sands industry, a Canadian minister said yesterday.

Rob Renner, the Alberta Environment Minister, who is responsible for regulating the industry’s safety, claimed that deepwater drilling was higher-risk than producing crude from tar sands was safer than deepwater drilling, in spite of the greater emissions of carbon dioxide involved.

“If you have a mishap two kilometres under the ocean, it is much more difficult to deal with than above ground,” Mr Renner told The Times on a visit to London. “The question is: do we have the requisite expertise and manpower to deal with it? We think there is a different profile between developments on land and at sea.”

John Sauven, executive director of Greenpeace, said: “Presenting the tar sands as a safe alternative to deep-sea oil is like saying that filterless cigarettes are healthier than cigars. Both carry massive environmental risks in terms of local people, wildlife and crucially the long-term stability of the climate.”

The Gulf oil spill is raising new questions about America’s oil strategy. Although just over half of US oil is still imported from countries such as Venezuela and Saudi Arabia, the fastest-growing source is from North America — particularly from the Gulf of Mexico and Canada’s oil sands regions.

Oil production from these two areas has doubled in recent years to 3.9 million barrels a day, supplying nearly a quarter of total US demand.

Oil sands companies in Alberta are already producing 1.3 million barrels a day and are on track to treble production by 2030.

The bitumen-rich sands of northern Canada are thought to contain 150 billion barrels of oil — second only to Saudi Arabia in terms of global reserves. But producing them is an energy-intensive and environmentally fraught process.

TIMES ARTICLE

Gulf Oil Spill Isn’t Just Damaging To BP

THE WALL STREET JOURNAL

MAY 17, 2010

By James Herron

When BP implements increasingly desperate-sounding methods to shut down its leaking well next week–blasting golf balls, shredded rubber and other junk into the well before filling it with cement–the rest of the oil industry will no doubt be praying for its success. [Read BP's latest press statement on the disaster here.]

You might think that companies like Royal Dutch Shell or ExxonMobil, both of which have had their share of environmental or safety scandals, would feel some relief that someone else is drawing the political heat. But the failure of a company as well funded, experienced and technologically advanced as BP to get a grip on this disaster after almost four weeks damages others too.

AP
The Deepwater Horizon oil platform leaning on it’s side before sinking into the Gulf of Mexico.

For many years, BP and its peers have bragged that they are the only ones with the skills and know-how to find and extract oil at the industry’s frontiers, whether in the deepest ocean, on remote Arctic shores or from complex geological formations. Until the Deepwater Horizon disaster, this was a convincing argument and these companies dominated new areas like offshore Angola or Russia’s far east.

As BP’s finest minds have tried every conceivable option to get a grip on their leaking well, and it becomes increasingly obvious that no established procedures existed to cap a leaking well in such deep water, confidence in the industry’s technological prowess has been tarnished.

Already, Shell faces problems with its plans to explore for oil in the Chukchi and Beaufort seas offshore Alaska this summer. Interior Department Officials, who approved Shell’s drilling plans last year, are refusing to sign off on those permits, at least until a review into the Deepwater Horizon disaster is complete.

President Barack Obama has accused the Interior Department’s Minerals Management Service of having a “cozy relationship” with the companies it regulates and has begun a review process that will likely lead to tougher regulations for all oil companies operating in the U.S.

BP finally got some good news Monday as one of its many attempts to contain the oil gusher beneath of the Gulf of Mexico finally paid off. It has successfully threaded a tube into the broken oil pipeline that is leaking onto the sea bed and is siphoning off around a 1,000 barrels of oil a day into a tanker at the surface.

However, as glimmers of hope come, this one is pretty dim, considering that at least 4,000 barrels of oil a day continues to pour into the Gulf. Furthermore, the discovery of huge plumes of oil deep beneath the surface of the Gulf of Mexico have raised fears that the current 5,000 barrel a day estimate for of the size of the leak, which is based on observation of oil visible on the surface, may be far too low.

This remains a disaster that threatens to destroy BP’s reputation, wreak billions of dollars in environmental and economic damage and threatens to be severely detrimental to the long term interests of the oil industry.

WSJ ARTICLE

Hoaxers target Shell with bogus Nigeria news

(Reuters) – Hoaxers targeted oil and gas major Royal Dutch Shell Plc on Monday, sending a bogus statement to news organisations about the company’s operations in Nigeria.

The e-mail, complete with Shell logo and links to genuine websites including Shell’s own, as well as to Shell’s customary footnotes about forward-looking statements, said the company planned to halt deepwater drilling off the coast of Nigeria.

“We are investigating who is behind the hoax e-mail,” said Shell spokesman Rainer Winzenried.

When contacted on the given phone number, hoaxers answered the phone by saying “Shell media relations” and proceeded to answer questions about drilling in Nigeria, saying Shell was facing pressure from groups such as Amnesty International.

Asked about the reasons for staging the hoax, the spokeswoman named on the bogus release, who said she was new to the company’s media relations team, seemed surprised and said “I’ll have to see what’s going on.”

Deepwater drilling is in focus because of the massive oil spill in the U.S. Gulf of Mexico from a well owned by BP Plc, one of Shell’s rivals.

Shell is one of the largest oil and gas producers in Nigeria. It is due to hold its annual shareholders’ meeting in the Hague on Tuesday, when it often faces questions from human rights and environmental groups about operations in the country.

Friends of the Earth Netherlands and four Nigerians are aiming to sue Shell and Nigeria-based Shell Petroleum Development Co (SPDC) in a Dutch district court on charges related to several incidents of oil spills.

Groups trying to draw attention to environmental issues have staged similar hoaxes in the past year. Activists known as the Yes Men posed as representatives of the U.S. Chamber of Commerce in October to draw attention to the debate over climate change.

One of the most notorious hoaxes happened in 2004 when BBC World and BBC News 24 ran an interview with a bogus Dow Chemical official, later identified as one of the Yes Men, who said the company admitted responsibility for the Bhopal disaster 20 years before.

(Reporting by Alex Lawler and Ikuko Kurahone in London and Catherine Hornby in Amsterdam; Editing by Amanda Cooper and David Holmes)

SOURCE ARTICLE

RELATED ARTICLE:

Shell Apologises for Human Rights Violations in Niger Delta

Arctic Drilling May be in Jeopardy

FOX NEWS

May 17, 2010 – 12:50 PM | by: Dan Springer

Shell Oil Company was all set to begin exploring the petroleum-rich arctic waters off the northwest coast of Alaska. But then the major spill in the Gulf of Mexico happened.

In response, President Obama issued a 30-day moritorium on new drilling permits and environmental groups sued to permanently block the plans. The moritorium is set to expire at the end of May.

The administration had already approved Shell’s plan to drill five exploratory wells this July in the Chukchi and Beaufort seas. And the Justice Department defended that decision to a three-judge panel of the Ninth Circuit Court of Appeals in Portland. Late last week the panel denied a request from Alaska Natives and environmental groups for an injunction to halt the drilling.

Residents of Point Hope, Alaska say a major spill would destroy their way of life. For thousands of years the eskimos have been living off what they can catch in the Arctic ocean. Bowhead whales, seals and fish comprise 75% of their diet.

Shell officials say while the ice and harsh winter conditions do present challenges in the Arctic, drilling can be done safely. In fact, Pete Slaiby, Shell Alaska V.P., tells Fox News the drilling depth in the Arctic is far more manageable than exploration in the Gulf of Mexico. The B.P. blowout happened at 5,000 feet, whereas the deepest exploratory well in either the Chukchi or Beaufort seas would be 150 feet.

Also, Slaiby says Shell has promised to have an oil spill response vessel in place for the duration of the drilling. Given the disaster in the Gulf, environmentalists are unswayed. The Center for Biological Diversity has given the Interior Department notice it plans to sue arguing the need for more research into the impacts of a major spill in the Arctic.

What’s at stake? According to the Minerals Management Service, there are 27 billion barrels of recoverable oil in the U.S. portion of the Arctic ocean. That’s 11 billion barrels more than has been produced on Alaska’s North Slope over the last 3 decades.

Shell has already spent over $3.5 billion on leases, equipment and research for its Arctic exploration. Now it must wait to see what the courts and Obama Administration will do next.

SOURCE ARTICLE

Shell to close main Montreal units in September

REUTERS

Main refinery units to shut in Sept.

CALGARY, Alberta, May 17 (Reuters) – Royal Dutch Shell Plc (RDSa.L) expects to shut the major units at its 130,000 barrel per day Montreal East refinery by September, as it follows through on plans to convert the facility into a distribution terminal.

The company will close the refinery’s main processing units — the alkylation unit and catalytic cracker — in September, with other units following.

The plant is expected to stop taking crude deliveries prior to the shutdown of the units, likely by the end of August, the company said.

“It will be a staged shutdown,” said Larry Lalonde, a Shell spokesman. “They’ll shut down over the course of September, through October and November. Then from there they’ll be into the full conversion.”

Shell, which has operated a refinery at the site for 76 years, put the Montreal East plant up for sale last year, saying it did not fit into its long-term strategy. It opted in January to close the facility after a seven-month search for a buyer came up dry.

Shell does not expect the shutdown to affect its customers. It has already begun to store product to see it over the transition period.

“We’re in the process now of stocking up on supply,” Lalonde said. “We’ll continue to supply the market through the light oil terminal we have in Montreal.”

Shell will continue to operate its 75,000 bpd Corunna refinery near Sarnia, Ontario, and its 100,000 bpd Scotford refinery near Edmonton, Alberta.

(Reporting by Scott Haggett; editing by Rob Wilson)

REUTERS ARTICLE

Qatar, Shell, China’s CNPC in gas agreement

BusinessWeek Logo

The Associated Press May 17, 2010, 12:51AM ET

Qatar has signed an agreement with Royal Dutch Shell and China National Petroleum Corp. to jointly explore for and produce natural gas onshore and offshore Qatar, Shell said Monday.

The 30-year agreement calls for Shell and CNPC’s PetroChina International to worth together in exploring for natural gas. Shell will hold a 75 percent share of the project, with CNPC holding the remaining 25 percent, Shell said in a statement.

The 8,089 square kilometer (3,123.17 sq. mile) “Block D” includes both offshore and onshore areas near Qatar’s northern city of Ras Laffan.

If exploration succeeds, Shell and PetroChina will produce the natural gas under the supervision of Qatar Petroleum, the statement said.

Tiny Qatar sits atop the world’s largest proven reserves of natural gas.

SOURCE ARTICLE

Shell eyes partnerships with national oil firms

REUTERS

* Australia major destination for investments

By Fayen Wong

BRISBANE, May 17 (Reuters) – Energy giant Royal Dutch Shell Plc (RDSa.L) may seek to forge more partnerships with national oil companies in a bid to gain greater market access, a senior company official said on Monday.

Ann Pickard, Shell’s new head of Australian oil and gas, told Reuters in an interview that Australia will also become the biggest destination for its investments in the next few years as it looks to boost its natural gas business to satisfy growing Asian demand.

“Where it makes commercial sense, we will look at more opportunities. We would like to do a bit more,” Pickard said, when asked about collaboration with state-owned energy firms.

Shell has teamed up with state-owned PetroChina (0857.HK) to bid for Australian coal seam gas producer Arrow Energy Ltd (AOE.AX) and plans to use Arrow’s gas to build a major liquefied natural gas (LNG) plant in the northeastern state of Queensland.

It was a clear win-win partnership for both parties, analysts said, as it allows Shell to get a foothold in the booming Chinese gas market, while it enabled PetroChina to avoid potential hostility amid caution on growing Chinese capital.

Pickard said the venture had not factored in the government’s proposed resource super tax when they launched a A$3.44 billion ($3.05 billion) bid for Arrow, but she would not comment if the bid would be amended due to the planned tax.

AUSTRALIA – NEXT TRANCHE OF INVESTMENTS

Pickard, who was previously head of Shell’s oil operations in Nigeria and the rest of Africa, is now tasked with a key role of growing the Australian business.

Shell said on Monday it plans to increase its LNG production capacity by 15 million tonnes per annum (mtpa) by 2020, of which most of the investment will be focused in Australia.

The energy giant is involved in a raft of LNG projects in the country, such as the producing North West Shelf development as well as the Browse, Gorgon, Sunrise and Wheatstone, which are in various stages of developments.

Pickard told reporters it expects to make a final investment decision on its flagship Prelude floating LNG project in Australia in early 2011 and plans to sell most gas through its own trading firm, which already has a number of long-term contracts.

“We’ll look at potential talks with the Pacific customers too,” Pickard said at the sidelines of an energy industry conference in Brisbane.

Shell reaffirmed its bullish outlook for global LNG market, forecasting demand to almost double to between 350 million tonnes per annum (mtpa) and 400 mtpa by 2020, compared with about 200 mtpa currently. ($1=1.129 Australian Dollar)

REUTERS ARTICLE

Shell Says Australia to Become Its Biggest Region for Spending

BusinessWeek Logo

By James Paton

May 17 (Bloomberg) — Royal Dutch Shell Plc said it expects Australia to attract more of the energy company’s investment than any other region, driven by liquefied natural gas projects.

Shell’s Australian workforce for gas exploration and production is likely to increase fourfold, Shell Australia Executive Vice President Ann Pickard said in an interview in Brisbane today. She gave no timeline for the increased spending or staff count.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

SOURCE ARTICLE