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Shell’s oil sands deliverer becomes downstream boss

Abbott also takes on a headache in the form of the company’s Motiva U.S. refining joint venture operation, where a new refinery unit faces piping and vibration problems .

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Thu Sep 12, 2013 1:10pm BST

By Andrew Callus

(Reuters) – Shell is to make John Abbott head of its fuels and chemicals business, pitching the deliverer of its Canadian oil sands expansion project into an industry debate over whether the “downstream” business he will run still fits with oil and gas extraction.

A 53-year-old Briton who joined Europe’s top oil company straight from university in 1981, Abbott is credited with bringing Royal Dutch Shell’s Athabasca oil sands expansion project in Canada on stream in the period 2008-2012.

He will join the company’s top executive echelon, the executive committee, taking on the role of downstream director at a time when Shell and its fellow top-tier multinational oil companies face shrinking returns on investment and growing exploration costs per barrel produced.

Some smaller oil companies in the United States have demerged their refining divisions into separate companies in an attempt to deliver more clarity of direction for investors. Some shareholders want Shell and the rest of the world’s top five to follow a similar route.

Athabasca is a project that complicates that debate because it extracts heavy oil and refines it as part of the same integrated operation. Oil sands accounted for 147,000 barrels a day or 4.4 percent of Shell’s output in 2012.

Abbott also takes on a headache in the form of the company’s Motiva U.S. refining joint venture operation, where a new refinery unit faces piping and vibration problems .

He will take over on Oct. 1 from Ben van Beurden, who will become Shell’s new chief executive from Jan. 1 next year.

In his current role of executive vice president of manufacturing, reporting to van Beurden, Abbott oversees the operation of 30 or so refineries and petrochemical plants worldwide and is responsible for about 30,000 employees and contractors.

Like many of Shell’s senior executives past and present, Abbott has been with the company for more than three decades. He has held management posts, mainly in the downstream segment of the business, in Asia, north America and Europe.

Van Beurden is to replace Peter Voser, who surprised insiders and shareholders earlier this year with news he will retire at the age of 55.

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