In a divided vote that prompted a bitter debate among some of its judges, the court left intact what some legal experts call a landmark ruling in September that companies cannot be liable in U.S. courts for violations of international human rights law.

The plaintiffs, families of seven Nigerians who were executed by a former military government for protesting Shell’s exploration and development, had sought to recover from the oil giant under a 1789 U.S. law known as the Alien Tort Statute.

ANCHORAGE, Alaska (AP) — Shell Alaska has dropped plans to drill in the Arctic waters of the Beaufort Sea this year and will concentrate on obtaining permits for the 2012 season, company Vice President Pete Slaiby said Thursday.

The recent remand of air permits issued by the Environmental Protection Agency was the final driver behind the decision, Slaiby said at a news conference.

Alaska receives upward of 90 percent of its general fund revenue from the petroleum industry, and top state officials reacted strongly to the decision. U.S. Sen. Mark Begich, D-Alaska, blamed the Obama administration and the EPA.

“Their foot dragging means the loss of another exploration season in Alaska, the loss of nearly 800 direct jobs and many more indirect jobs,” Begich said. “That doesn’t count the millions of dollars in contracting that won’t happen either at a time when our economy needs the investment.”

The EPA issued Shell an air permit, but the agency’s review board granted an appeal because of limited agency analysis regarding the effect of emissions from drilling ships and support vessels.

Slaiby said the issue is not with the environment but with the process not being satisfied. He said Shell has no air issues with Alaska villages.

“That’s coupled with $15 million in improvements we made on these assets to put together what’s really a world-class program,” he said.

The subsidiary of Royal Dutch Shell PLC has invested more than $3 billion in exploration off Alaska’s coast since 2005, Slaiby said. The company paid $2.2 billion for leases in the Chukchi Sea off Alaska’s northwest coast that have been challenged.

The company had hoped last year to drill exploration wells during the 2010 open water season in both the Chukchi and the Beaufort but its plans were put on hold by Interior Secretary Ken Salazar after the Deepwater Horizon disaster in the Gulf of Mexico.

Salazar suspended applications for permits and has announced no timetable for lifting the suspension, saying the department will take a cautious guided by science and the voices of North Slope communities.

Slaiby in October said Shell would focus on one or two exploratory wells in the Beaufort off Alaska’s north coast during the roughly 105-day open water season.

Drilling in Arctic waters is opposed by environmental groups and some Alaska Native groups, who say petroleum companies have not demonstrated an ability to clean up a spill in ice-choked waters. They also say the remote location of drilling sites, the area’s notorious inclement weather and the lack of infrastructure, including a deep-water port, would make a cleanup of a major spill nearly impossible.

They also claim drilling will stress marine mammals already being harmed by climate warming and diminishing sea ice, including polar bears, ice-dependent seals and walrus.

Shell has stressed that Arctic drilling would be in water far more shallow than the Macondo well, the site of the Gulf of Mexico disaster, and that the risk of a spill is minimal. The company also said it would position a second drilling ship in Alaska as a safety measure, so if the first drilling ship were crippled by a blowout, the second ship could drill a relief well.

Shell’s primary drilling ship has been moved to prospects off New Zealand and the company will look for other ways to use support vessels. The backup drilling ship will remain in Dutch Harbor, a port in the Aleutian Islands, Slaiby said.

Alaska officials have been unwavering in their support for drilling. The trans-Alaska pipeline operates at about one-third capacity, and state officials have looked to offshore sources to keep it viable. Alaska Gov. Sean Parnell said it was unfathomable that a company could buy federal leases but not get onto them within five years.

“It’s also unfathomable that they cannot get an air permit after five years when they can get one in the Gulf of Mexico within months,” he said.

Republican U.S. Sen. Lisa Murkowski said actions taken by the Obama administration will result in higher gasoline prices and a loss of jobs and revenue.

“We talk a lot about the economy, but rarely do our actions match our rhetoric,” she said. “That’s unfortunate.”

SOURCE ARTICLE

By an outspoken former employee of Shell Oil USA

When I was in my teens I can remember watching what is now a cult sci-fi flick called ‘Invasion of the Body Snatchers’. It is story about aliens who come to earth as plants and the seed pods turn into replicas of humans, but they aren’t, they are alien predatory ‘pod-people’ out to take over the world.

The story of RD Shell’s seconding of the Nigerian government reminded me of this movie.

Is the Nigerian government run by Nigerians or is it really run by alien predatory ‘Shell-people’ masquerading as Nigerians whose objective is to loot the country and suck it dry of its oil wealth. Beware, they are not only coming, these alien ‘Shell-people’, they are here. Run for you lives! RUN! RUN!! AHHHH!!!

Alternatively, the Nigerians could run the sob’s out of the country. Maybe even at gun point.

Who knows how this story will end.

The Telegraph

Friday 04 February 2011

Despite higher oil prices helping double profits at Royal Dutch Shell this year, the energy giant’s share price has sunk 3pc on production problems and delays to its US Arctic drilling.

Shell has seen a number of major projects from Qatar to Brazil start producing oil and gas this year, lifting output and revenue Photo: Andrew Crowley

By Rowena Mason 7:00AM GMT 04 Feb 2011

The Anglo-Dutch company made profits of $18.6bn (£11.5bn) on a cost of supply basis, which strips out the effects of inventory changes.

For the fourth quarter, its profits were $5.7bn – up from $1.2bn a year ago – but below analysts’ expectations. This sent its share price down 75½, or 3pc, to £21.75½.

Shell has seen a number of major projects from Qatar to Brazil start producing oil and gas this year, lifting output and revenue. Production for the year rose 6pc to 3.3m barrels per day, up from 3.1m a year earlier.

However, output was not as high as expected because of maintenance programmes, and profitability was also affected by lower gas prices in the US.

“Fourth-quarter and full-year 2010 earnings were supported by higher oil prices and chemicals margins,” said Peter Voser, chief executive of Shell. “However, our earnings were impacted by weak refining margins, pressure on certain regional natural gas prices, and volatility in downstream marketing margins as a result of rising oil prices.”

Investors were also disappointed that Shell has not been able to gain permits to drill in the Arctic because of regulatory worries following BP’s Gulf of Mexico oil disaster. It will now not drill until 2012 at the earliest, having planned to start in July last year and then July this year.

Mr Voser said Shell is confident it is still worth drilling in the environmentally-sensitive region.

“There will be challenges. Yes, we believe we can do it and yes, we believe that strategically the Arctic is an area of significant interest and opportunity for Shell,” he said.

Mr Voser added that there is “more to come from Shell” following a management shake-up that has seen 7,000 job losses and a renewed focus on building production.

The company’s dividend will be 42 cents per share for the fourth quarter of 2010 and Shell guided that it is likely to be the same for the first quarter of this year.

Shell had been lagging BP until the Gulf of Mexico oil spill hit its nearest rival’s profitability and caused its dividend to be cancelled, then reinstated at half the previous level. On Tuesday, BP reported an annual loss of $4.9bn and fourth quarter profits of $4.6bn, while warning production would be 11pc lower.

The reaction from the City to Shell’s results was mixed, with Collins Stewart analysts Gordon Gray and James Evans arguing that the results were “disappointing” but the shares remain “attractive”.

“Shell’s results were disappointing but we see nothing in the figures which gives us concern over the company’s growth prospects, and 2010 has seen strong progress towards Shell’s strategic targets on volumes and cash flow,” they said.

“We recommend buying into any results-driven weakness as we continue to see the strongest turnaround in free cash flow in the sector on a one to two-year view, and we still think valuations are attractive.”

SOURCE ARTICLE

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By CLIFFORD KRAUSS

DAILY MIRROR

THE boss of oil giant Shell has sparked fury by claiming his firm is “suffering like motorists” from sky-high prices, while revealing profits of £440 a second.

Peter Voser tried to defend record high pump prices by claiming the soaring cost of oil hammered its refineries, which convert crude into fuel and other products.

Voser, who raked in £2.8million in 2009, blamed the pain on VAT and fuel duty, arguing 70% of the pump price went to the Treasury.

He said: “I suggest the motorist talks to the government.”

But Mr Voser ignored the fact Shell cashed in on the sharp rise in oil prices in its “upstream” production arm, helping profits rocket almost 400% to £3.5 billion in the final three months of 2010.

Peter Carroll, from the Fair Fuel UK campaign group, fumed: “Most people will be shocked. Real suffering is not being able to afford to fill-up your tank.”

“This just shows that while motorists and the national economy are the losers, oil companies, governments and speculators are the winners. They are laughing all the way to the bank.”

A surge in oil prices above $100 a barrel has pushed the national average for unleaded to 128.62p a litre and diesel to 133.38p.

Higher oil prices for much of last year saw Royal Dutch Shell’s annual profits nearly double to £11.5bn.

The figure came two days after rival BP revealed its first annual loss in nearly two decades , as the cost of the Gulf of Mexico oil spill ballooned to more than £25billion.

Despite Shell’s bumper profits, shares in the multi-national dropped 3% yesterday after investors reckoned it could have made even more money.

Read more: http://www.mirror.co.uk/news/city-news/2011/02/04/shell-boss-claims-the-firm-is-suffering-like-motorists-despite-making-440-a-second-115875-22897128/#ixzz1CwkGmHug

Shell’s image is still mired by claims over oil spills, Ken Saro-Wiwa’s hanging and WikiLeak’s revelations of infiltration

John Vidal, Environment editor

Thursday 3 February 2011 19.07 GMT

Ogoni leader Ken Saro-Wiwa was hanged by the Nigerian military regime after organising opposition to Shell’s activities in the Delta. Photograph: Greenpeace/AFP

Despite today’s soaring profit figures, Shell remains a company under siege for its lucrative activities in Africa.

At a parliamentary hearing in the Netherlands last week, Amnesty International, Friends of the Earth, Nigerian and British activists, Dutch MPs and others accused the company of breaches of safety, human rights abuses, destroying lives and the environment, hiding information, gas flaring and blaming locals for oil pollution in Nigeria.

Shell Holland’s president, Peter de Wit, denied all the charges and insisted that the company applied “global standards” to its operations around the world. He argued that Shell had provided thousands of well-paid jobs, brought know-how, education and technology and had launched numerous community projects in the west African nation.

“We consider that Shell is doing a good job often under difficult circumstances,” he said.

He was backed by Ian Craig, Shell’s head of exploration for sub-Saharan African, who argued that the company could not be held solely responsible for damage to the environment caused by oil extraction in the oil-rich region. “We do bear some responsibility, but we cannot bear it entirely,” Craig told the Dutch parliamentDutch MPs.

But Shell’s operations in Nigeria will come under fire again in the coming weeks. The UN Environment Programme, using money from Shell, has spent four years investigating and assessing thousands of oil spills in Ogoniland, the small oil-rich region of the Niger Delta where the company was active until forced out over pollution by Ogoni leaders including Ken Saro-Wiwa, who was hanged by the Nigerian military regime in 1995.

The UN report will not say who caused the spills but will confirm that large areas of land remain polluted, drinking water wells are still highly toxic and many of the fishing creeks are unproductive.

Shell Nigeria argues that 90% of the pollution is caused by sabotage by local people but this will further inflame Nigerian and foreign environmentalists who accuse the company of being in league with the Nigerian government, falsifying records of spills and acting as an unaccountable parallel state.

This was, in part, confirmed in December by WikiLeaks cables showing that Shell had inserted staff into all the main ministries of the Nigerian government, regularly swapped intelligence with the US government and informed on militants and activists. The company boasted that it knew local politicians’ every move in the Delta.

Last year in New York the families of the nine Ogoni activists who were hanged by the Nigerian military government in 1995 alleged that Shell had conspired with the government to capture and hang the men, and had worked with the army to bring about killings and torture of Ogoni protesters. The company denied the charges but settled out of court and agreed to pay £15m as a humanitarian gesture.

GUARDIAN SOURCE ARTICLE

Shell’s search for profits widens even as the oil price climbs

• Shell now ‘world’s largest trader’ as well as oil major
• Plans to explore in Arctic, Iraq, Russia and deep sea

Terry Macalister: Thursday 3 February 2011 20.07 GMT

Shell earned the majority of its profits in 2010 not from pump sales, but from exploration and development. Photograph: Andy Rain/EPA

As Shell fought to dismiss accusations today that it was cashing in on high oil prices, the company gave a new insight into how it has racked up billions in profit by revealing itself as the “world’s biggest trading business”.

Peter Voser, Shell’s chief executive, said he felt the pain of motorists struggling to pay record fuel prices, pointing out that the Anglo-Dutch oil company was also suffering in its refining and marketing businesses. But critics dismissed that argument, saying that $16bn of the $18.6bn earned by the company over the past 12 months came from the “upstream” operations of exploration and development.

While refining profits have been noticeably thin for all oil companies in recent years, Shell has found other ways of boosting its profits even further by buying and selling products for its own and third-party interests.

Simon Henry, the chief financial officer, made the unusual disclosure today that Shell “may now be the world’s largest trading business” – not just in oil, but also chemicals, natural gas and even carbon dioxide. He denied the company acted as a “speculator”, but admitted that volatility – when prices gyrate wildly up and down – was the point at which any trading unit would make the most money.

The company declined to disclose how many traders were now employed in a business that has increasingly attracted the attention of banks and other non-industry players. The role of such intermediaries is a sensitive issue given that the Middle East oil cartel, Opec, has often blamed them for driving up prices irrespective of actual supply or demand.

Shell sells petrol and diesel in Britain through 900 branded sites but owns 600 of them; the rest are controlled by third-party dealers who have the freedom to charge their own prices.

Supermarkets tend to be the retail price-setters, and City analysts confirm there are no great profits to be made, which is why the number of outlets has plunged over the past five years.

Most of Shell’s 100,000 employees are not working at the pumps in a UK service station but in offices, refineries and offshore platforms in more than 80 countries across the globe.

Non-essential Shell staff have just been evacuated from Egypt, but others are still moving into Iraq, where the company is still pressing ahead with new plans to develop the huge Majnoon and West Qurna fields. In Qatar, Shell has been spending more than $20bn (£12.5bn) and has employed more than 50,000 workers to build new gas-to-liquids plants, where gases are transformed into synthetic liquid fuels, and liquefied natural gas facilities.

Shell is also busy building up its positions in the deep waters of the Gulf of Mexico and off Brazil, despite the safety concerns triggered by BP’s Deepwater Horizon spill.

That is a more obvious way of expanding the bottom line, as are takeovers, but Voser declined to comment on speculation that his company had considered a move on BP at the height of its Gulf crisis.

The Anglo-Dutch company has just won new exploration rights off Greenland along with Statoil of Norway and expects to start drilling wells in two to three years. But it has been forced to shelve plans for offshore exploration of Alaska owing to a continuing lack of permits and tighter safety requirements following the Gulf accident. Voser said he was still hopeful of moving ahead with drilling in the Beaufort Sea in 2012 but admitted: “Critical permits continue to be delayed and the timeline for getting these permits is still uncertain.”

Shell said it was also planning to forge closer links with Rosneft and Gazprom in Russia though he dismissed the idea of a share swap similar to the one just arranged between BP and Rosneft.

Shell might have made fourth-quarter profits of $5.7bn (£3.5bn) and paid out dividends of $10.2bn during 2010, the highest level of any company in Europe, but it was not its best ever result, and was not enough for the City either. Shell’s shares fell 3%; analysts at broker Collins Stewart complained that the figures were “disappointing”. Voser said he, too, was not satisfied with the final quarterly results, and Shell claimed it could still do better – partly through the selling-off of further non-core assets such as the Stanlow refinery in Cheshire.

While he believed the current high crude price might not last because of the “cushion” provided by spare capacity among Middle East producers, he said the commodity boom disrupted by recession in the west “may return”. That could please investors and pension funds but will look like the road to ruin for the hard-pressed British motorist.

GUARDIAN SOURCE ARTICLE

“Despite our investment in acreage and technology and our work with the stakeholders, we haven’t been able to drill a single exploration well,” Voser told reporters today on a conference call. “Critical permits continue to be delayed and the timeline for getting these permits is still uncertain.”

ROYAL DUTCH SHELL CEO PETER VOSER

Bloomberg

By Eduard Gismatullin – Feb 3, 2011 12:19 PM GMT+0000

Royal Dutch Shell Plc, Europe’s largest oil company, will delay its drilling campaign in Alaska after the worst U.S. oil spill in the Gulf of Mexico last year.

Shell hasn’t received full clearance to start drilling off the coast of Alaska, according to Chief Executive Officer Peter Voser. The company decided to postpone its plans to spend as much as $150 million in the region until 2012.

“Despite our investment in acreage and technology and our work with the stakeholders, we haven’t been able to drill a single exploration well,” Voser told reporters today on a conference call. “Critical permits continue to be delayed and the timeline for getting these permits is still uncertain.”

The Hague-based company last year asked the U.S. Interior Department for a permit to conduct exploratory drilling this year in the Beaufort Sea. Shell in 2008 offered $2.1 billion for drilling rights in the Chukchi Sea off the coast of Alaska.

Alaska may hold the second-biggest U.S. oil and gas reserves after the Gulf, according to government estimates.

Shell in November said it had planned to limit the effect on wildlife from exploration in the Beaufort and Chukchi seas, meeting the concerns of environmental campaigners.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

SOURCE ARTICLE

THE WALL STREET JOURNAL: THE SOURCE

By James Herron: FEBRUARY 3, 2011

Reuters

Sometimes equity markets have a sick sense of humor.

On Tuesday, troubled oil giant BP posted zero growth in fourth quarter adjusted profit, said its oil and gas output had plunged by more than 9% and had a major Russian exploration deal halted by a court order. Its shares closed just over 1% higher.

On Thursday, BP rival Royal Dutch Shell grew its adjusted profit for the quarter by almost 50%, produced 5% more oil and gas and said its flagship gas projects in Qatar were starting up exactly on schedule. Its shares fell more than 3%.

This reaction seems all the more perverse when you consider that both companies posted a similar performance relative to analysts’ expectations– each undershooting by a bit more than 10%. But it demonstrates the divergent paths the two oil giants are taking in the wake of the Deepwater Horizon oil spill and how investors are coming to regard them differently.

Shell continues very much along the traditional path of Big Oil–focussing on growing output, trimming costs and paying out huge dividends every quarter like clockwork. BP has boldly turned off that beaten path by selling major chunks of its assets, ditching production targets, slashing its dividend and cutting risky deals with the Russians.

This could turn BP into what some analysts believe will make it faster growing and, dare I say it, more exciting than its rival.

BP’s woes are well known. It has written off $40 billion for the Deepwater Horizon disaster–pushing it to its first annual loss in 20 years–and has been forced to sell off up to $30 billion of oil and gas production assets and half its U.S. refining capacity to cover that cost. Because of this action, BP’s all-important production rate is plunging just as the oil price hits $100 per barrel again. It produced 15% less oil and gas in 2011 than in the year before the disaster.

This is in stark contrast to Shell, which is just emerging from a successful restructuring and is set to reap the rewards of major long-term investments over the next couple of years. By 2012 it expects its production to have grown by 11% from 2009 and its cash flow to be a whopping 80% higher, even if the oil price were to fall back to $80 a barrel.

Shell will also continue to pay a quarterly dividend of 42 cents a share, giving a yield of 4.5%. BP, after nine months of paying no dividend at all, will now give investors just 7 cents a share, half the pre-spill level, for a yield of 3.6%.

If there ever was an investment no brainer, you’d think this would be it.

“Shell is yielding nearer 4.5% without any of the legal risks that BP still has to face in the U.S.,” said ING analyst Jason Kenney. “Essentially, Shell looks lower risk and higher return from an income fund perspective.”

However, it is important to remember that once BP completes its current painful downsizing, its dividend growth prospects are better than that of Shell, Kenney said. There is also, “a potential wall of cash that is possible for BP by end 2013 due to U.S. escrow commitments ending, partner cost recovery, further divestment income and the benefits of superior growth,” he said.

BP’s new venture to explore for oil in Russia’s Arctic in partnership with Rosneft, assuming the deal isn’t blocked by the troublesome Russian partners in TNK-BP, also offers more tantalizing growth prospects into the long-term than are apparent from Shell’s pact with Gazprom. And although BP CEO Bob Dudley’s bold moves since Deepwater Horizon carry their risks, they certainly make a compelling story for investors to get behind.

BP may not be so tempting to the income funds that love Shell’s yield, but others seem to like its prospects.

SOURCE ARTICLE WITH COMMENTS

BP Photo: AFP/Getty Images