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Posts from ‘June, 2014’

Rich hypocrite Jorma Ollila joins U.S. investment bank

By John Donovan

Jorma Ollila, the departing Chairman of Royal Dutch Shell Plc., has joined a New York based investment bank, Perella Weinberg Partners.

I can only assume that they are not concerned by the scandal of his failure to disclose ownership of a Luxembourg company worth €8.2 million. He admitted breaking the law,  but prefers to call it “neglecting the law.”

This from a man who has preached the gospel of transparency.

What a gap between the lofty rhetoric in his speeches, no doubt written by someone else, as opposed to his actual deeds. read more

Marvin Odum speaks out

Article by M. Nadeem published 27 June 2014 by insider monkey.com under the headline: “Royal Dutch Shell plc’s Subsidiary Shell Oil Company President Marvin Odum Discusses Energy Industry State”

In a Fox News’ Opening Bell program on June 27, Shell Oil Company’s, a subsidiary of Royal Dutch Shell plc), President, Marvin Odum, talked about the current energy industry situation. Mr. Odum said that they are worried about raising oil prices, but, at the same time, they also understand that geopolitical events and other dynamics across the industry.

Talking about oil supply, Mr. Odum stated that there is no production impact as a result of what is going on in Iraq, and hopefully it will never happen. He also noted that “energy demand is doing nothing but increasing. And that’s even with tremendous efforts around efficiency, alternative fuels and everything else.” read more

Shale’s junk debt could get shaky if Fed raises rates

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Extracts from a Houston Chronicle article by Collin Eaton published 27 June 2014

(Good article. Not Shell specific, but a generic problem to which Shell is heavily exposed)

Two years after natural gas prices collapsed, Chesapeake Energy’s $12 billion in corporate debt last month nearly made it out of junk territory.

The natural gas producer has sold off thousands of acres, curbed billions in spending, cut a tenth of its workforce and banished its chief executive in the effort to trim a debt-laden balance sheet.

A credit upgrade in May signaled progress, but hardly an end to an episode that has highlighted the dangers of the U.S. shale industry’s addiction to risky debt. read more

Spot the Rooney in your portfolio

Screen Shot 2014-06-28 at 10.46.12Extracts from a Motley Fool article by Harvey Jones published by The Yorkshire Post on 28 June 2014 under the headline: “Motley Fool: Spot the Rooney in your portfolio

Tesco isn’t the only stock displaying Rooney-esque tendencies. Anglo-Dutch oil major Royal Dutch Shell has also been off the pace.

First quarter earnings of $4.5bn were sharply down from $8bn one year earlier.

Broker UBS recently complained the stock was losing “near-term momentum”, just as Rooney did as he approached the penalty box against Italy…

Shell once looked like a world beater.

Lately, it has been scaling back its ambitions, pulling out of shale gas, selling its stake in the Brazilian deepwater project BC-10, and turning down major projects in Australia and Louisiana. read more

BP and Shell keep a watchful eye on events in Iraq

Screen Shot 2014-01-30 at 00.47.49Extracts from a This Is Money/Daily Mail article by Rob Reed published 27 June 2014 under the headline: “BP and Shell keep a watchful eye on events in Iraq as violence continues to escalate in the region”

The upward pressure on oil prices since terror group ISIS began its horrific offensive has been echoed by even bigger movements in the share price of firms with an Iraqi presence. The two British supermajors with a foot in Iraq are BP and Shell, the former operating the vast Rumaila field and the latter developing sister prospect Majnoon. Both have removed non-essential staff but say their operations, in the to-date peaceful oil-rich south of the country, have been unaffected. If Baghdad were to be overrun, that would be a different matter, but oil industry types are quietly hopeful that it won’t come to that. read more

Greenpeace scales EU buildings to protest energy reliance on Russia

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Extract from EuropeOnline-Magazine article published 27 June 2014

Brussels (dpa) – Greenpeace activists climbed buildings and cranes near an EU summit Friday in a protest denouncing big energy companies for boosting the bloc‘s reliance on Russian gas and oil imports. Greenpeace said 35 activists unfurled banners from their perches despite tight security measures in place for the summit. The banners pictured a car driving over a cliff with wheels bearing the logos of French energy giant EDF, Dutch-based Shell and German companies E.ON and RWE. Several activists could be seen hanging from a crane overlooking the summit venue. read more

LNG as a fuel carries with it many risks

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Extracts from a MarineLink.com article by Joseph Keefe published 26 June 2014 under the headline: “Maritime Fuel of the Future: Training to an Uncertain Standard”

First extract

Despite its unquestionable allure, LNG as a fuel carries with it as many risks as it does answers to the problems it promises to solve.

Second extract

Separately, Royal Dutch Shell plc announced in December that the company would not move forward with a proposed 140,000 barrels per day Gulf Coast gas-to-liquids (GTL) project in Louisiana. Shell described the decision tersely by saying, “Despite the ample supplies of natural gas in the area, the company has taken the decision that GTL is not a viable option for Shell in North America, at this time, due to the likely development cost of such a project, uncertainties on long-term oil and gas prices and differentials, and Shell’s strict capital discipline.” read more

High level of corporate secrecy in Myanmar oil & gas sector-Global Witness survey

Screen Shot 2014-02-10 at 16.29.29Extract from a Thomson Reuters Foundation article by Thin Lei Win published 26 June 2014

YANGON (Thomson Reuters Foundation) – As resource-rich Myanmar gears up to join the global anti-corruption scheme for the oil, gas and mining sector, a survey by a London-based advocacy group found widespread corporate secrecy in the sector, which has long been plagued by corruption.

Of the 47 local and international companies which won major oil and gas blocks in October and March, only 13 responded to questions about their ownership, Global Witness said on Thursday. The Netherlands’ Berlanga Holding B.V., Italy’s Eni, Anglo-Dutch Shell and Thailand’s PTTEP South Asia, a subsidiary of publicly traded PTTEP, are among those that did not respond, it said. read more

One Reason Why I Wouldn’t Buy Royal Dutch Shell plc Today

Screen Shot 2014-06-23 at 11.37.41Extracts from a Motley Fool article by Royston Wild published 26 June 2014 

Shell has spun off a multitude of upstream and downstream assets in recent years in order to build its dividend and share repurchase-supporting cash pile and reduce its exposure to non-core assets. The oil giant also offloaded its Australian Geelong refinery and almost 900 pump stations in Australia to Vitol for $2.6bn back in February, and follows other downstream sales including that of its liquefied petroleum gas (LPG) operations in the Philippines late last year. The business has also offloaded upstream assets from the UK to Egypt and across Scandinavia over the past 12 months. The effect of this severe asset cutting caused total output during January-March to drop 9% to 3.3 million barrels of oil equivalent per day, and the company has hinted at further divestments to come. read more

Ukraine Discomfort for Shell and Chevron

Screen Shot 2014-03-04 at 17.39.57Shell entered into the deal in 2013 with then Putin puppet President Viktor Yanukovych, before he was ousted. As can be seen in the FT article, Shell and Chevron are now both trying to hide behind claimed business principles. Its a bit late for that.

By John Donovan

The Financial Times has published an article about the uncomfortable position of Shell and Chevron in the Ukraine crisis.

Extract

Getting caught up in a war zone ranks among the worst-case scenarios for an oil company. This has happened to Royal Dutch Shell in eastern Ukraine, where heavy fighting between pro-Russian separatists and Ukrainian military forces continues.

What is even worse is that both energy giants have Ukrainian partners in shale gas deals with dubious connections to the former regime, in a country famed for corruption.  read more

Are Asset Sales the Answer for Royal Dutch Shell plc?

Screen Shot 2014-06-23 at 11.37.41Extracts from a Motley Fool article by Arjun Sreekumar published 23 June 2014

On Monday, Shell announced the sale of a 19% stake in Woodside Petroleum, a deal that is expected to raise $5 billion. On Wednesday, the company announced that it had filed a registration statement with the U.S. Securities and Exchange Commission related to the proposed IPO of its pipeline subsidiary, which could raise up to $750 million. Due largely to ill-timed investments in U.S. shale, continued security issues at its Nigerian operations, and its beleaguered drilling program in Alaska’s Chukchi Sea, Shell’s return on capital employed, or ROCE, averaged under 15% from 2008 to 2012. Sales of under performing downstream and upstream North American assets are providing much-needed cash and should help the company gradually improve its return on capital. Overall, the combination of asset sales, reduced spending, and higher cash flow should allow Shell to grow its dividend at a stronger pace over the next few years, assuming commodity prices remain high and assuming that the oil giant can bring new projects online on time and on budget. read more

Chevron Cancels Bulgaria Fracking, Shell Postpones Ukraine Plans

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Screen Shot 2014-03-04 at 17.39.57Extracts from a CorpWatch article by Richard Smallteacher publish 12 June 2014

Fracking for oil and gas across Europe has suffered a series of setbacks with Chevron closing its offices in Sofia, Bulgaria, and Shell postponing fracking plans in the Ukraine by at least two years. Meanwhile the French government is standing firm in its opposition to fracking. Shell announced that it would take a respite from drilling for gas in the 8,000-square-kilometer Yuzivska field in the eastern Ukraine in early June. The company was awarded the concessions by the government of Viktor Yanukovych in January 2013, a year before he was ousted from office by violent protests this past February. Since then, clashes between government forces and pro-Russian militias have caused Shell to reconsider, not least because Shell has other lucrative energy deals in Russia. “We obviously need to assess the future security situation as it develops because the safety of our own people is our first priority,” Simon Henry, Shell’s chief financial officer, told Bloomberg TV. “Russia is a major holder of hydrocarbon reserves, possibly the largest in the world. So in the long term it really does matter.” read more

Film of Royal Dutch Shell founder Sir Henri Deterding giving a Nazi salute

Video clip from a PBS TV Documentary adapted from Daniel Yergin’s book “The PRIZE: Epic Quest for Oil, Money and Power. Published in 1992 by FREE PRESS ISBN 0-671-79932-0

The Prize (Part 2 of 8) – “Empires of Oil”

Covers the story of Royal Dutch Shell.

Includes, at just over 49 mins, film of Royal Dutch Shell founder Sir Henri Deterding giving a Heil Hitler salute at a major sporting event for Shell employees celebrating his birthday. 

Extract from narration by Donald Sutherland: read more

Shell Sells Eagle Ford Assets as Part of Global Repositioning

Screen Shot 2014-06-23 at 11.37.41Extract from an Industrial Info Resources article by John Egan published 23 June 2014

Royal Dutch Shell plc is selling its acreage in the Eagle Ford Shale to Sanchez Energy Corporation for about $639 million, continuing the super-major’s asset sales and portfolio repositioning. Shell bought that acreage a few years back for an estimated $1 billion. Last summer, the super-major took a $2.1 billion write-down on the value of its Eagle Ford assets.

FULL ARTICLE

Shell logo fourth oldest in the world

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Extract from an article by Thomas C. Frohlich and Alexander Kent, 24/Wall St. published 21 June 2014 under the headline: “The 10 oldest company logos in the world”
read more

Shell offers $51 million to settle Nigerian oil spills claim, but will pay much more

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By John Donovan

The London law firm Leigh Day has rightly rejected a £30 million pounds ($51 million) offer from Shell to settle a compensation claim from 15,000 residents of the Bodo community in Gokana Local Government Area of Rivers State, Nigeria. 

The offer emerged from a London court hearing on Friday 20 June 2014.

The following outspoken comment was attributed to a senior Shell executive.

The Managing Director of the Shell Petroleum Development Company of Nigeria Limited (SPDC), Mr. Mutiu Sunmonu yesterday called on the affected community to direct their UK lawyers to stop wasting more time pursuing enormously exaggerated claims, saying the company wants to compensate fairly and quickly those who have been genuinely affected and also clean up all the affected areas. read more

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