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China a sink hole for Royal Dutch Shell

There are so many things wrong in China and RDS has no idea of what is going on. Investors be aware that it is a sink hole with no financial bottom and the “good ole boy” politics are in play in China.

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Posting on Shell Blog by “Tyler” on 2014/04/05 at 04:04

Let’s talk China.

Shell has made commitment to drill Sichuan Province (press release 03/2014). What the story doesn’t tell everyone is that Shell has spent 1 Billion USD and has yet to find sustainable gas.

It also does not address the fact that Shell China has gone from 9 rigs to 1 rig in Sichuan.

Office staff in Chengdu is over 500 people for a 1 rig operation, by the end of 4Q 2014.

Let’s not forget that Shell China has been put under the US Unconventional Wells group. These are the same ones that screwed up the US Shale Gas Projects. The new manager is Chengdu is an American who came from Alaska, we know how that turned out.

There are so many things wrong in China and RDS has no idea of what is going on.

Investors be aware that it is a sink hole with no financial bottom and the “good ole boy” politics are in play in China.

Comment posted on Shell Blog by shellwaarbenjijnu on 2014/04/06

@Old EP Hand – you are absolutely spot on in respect of Odum. Of course he should be fired. He is the “captain” of the Titanic that is the Shell operation in the Americas and is therefor 100% accountable for all that goes right and WRONG on his ship. There are smooth talkers and smooth talkers but none come as close to Odum (although the likes of Botts and Hoffmeister came close). You says it stinks to heaven but that is the problem in the US. It is indeed a “heaven connection”. All these guys at the top have their Southern Baptist, Mormon, etc closed shops and they will protect themselves as they hold hands, close their eyes and “praise the lord”.

@Tyler – your point on China is similar. The “good ole boy” politics and “clappy handy” church connections do not make for clarity on accountability & responsibility and hence excellence in business results (and ethics). Let us hope (and pray??) that van Beurden puts a stop to this poison which has weakened Royal Dutch Shell since the late 1990′s. In the FT interview of April 1 van Beurden talked of the necessity of taking tough choices. He has a number to take but firing incompetent, smooth talking, power point pilots from the US should be one of the easy ones for him to take.

Comment posted on Shell Blog by AsiaDragon on 2014/04/06

Tyler, well said. Heard Ben coming to China to sign off another U$0.5bil to sink in Sichuan. As long as you have the American cowboys running the show, we really pity Shell. We don’t have Odum here but we have Brad Kerr. Ben, please do something with Ole boys and get rid of the high overhead if you are serious about developing unconventional in China.

RELATED ARTICLE: Royal Dutch Shell News: China Investment & Shareholders Rewards

RELATED INFORMATION

In China, Shell operates the onshore Changbei tight-gas field under a PSC with PetroChina. The two parties have also agreed to appraise, develop and produce tight gas in the Jinqiu block in the central Sichuan province under a 30-year PSC (Shell interest 49%), which expires in 2040. The Jinqiu project achieved first gas production in September 2011. Also in Sichuan, Shell and PetroChina are assessing shale gas opportunities in the Fushun-Yongchuan block. The two parties are also assessing opportunities in coalbed methane in the Ordos Basin, where Shell has an agreement to evaluate resources in North Shilou. Shell is also a partner in the Hangzhou city ring joint venture that develops, operates and manages a high-pressure natural gas pipeline system. Shell’s Downstream business in China has 15 joint ventures and 9 wholly-owned companies. The various Shell ventures cover about 700 Retail fuel stations, 7 Lubricant blending plants, 10 Bitumen plants, and the Nanhai Petrochemicals complex.

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