Royal Dutch Shell Plc CEO Ben van Beurden says he can’t deny returns are too low
By John Donovan
Mixed fortunes for Shell in the last few days.
Royal Dutch Shell CEO Ben van Beurden has admitted to the Wall Street Journal that he cannot deny that investor returns are too low. He has also reportedly stated: “We don’t have a [production] volume or capital-employed target. What I want to show is that we can grow free cash flow.”
According to Oil and Gas Insight, Royal Dutch Shell is ending its joint venture (JV) with Saudi Aramco for the Kidan gas development project in the Empty Quarter. This continues a string of disappointments following the opening of Saudi Arabia’s upstream to foreign participation in a bid to boost domestic gas exploration and production. Now, with Shell’s looming exit, Aramco’s ambitious efforts to draw foreign players into development of the Kingdom’s gas reserves seem set to fail.
MalaysiaCronicle.com reports that Royal Dutch Shell has hit the big time in Malaysia with 10 new gas discoveries so far this year, its highest annual gas finds in five years. Shell upstream international director Andrew Brown is quoted as saying that “Malaysia is the No. 1 country for gas discoveries for Shell in 2014 and we are extremely proud of that performance.”
As is clear from this informative article by Carey Restino, The Arctic Sounder remains unconvinced about Shell’s latest Arctic drilling plans and highlights some of the failings of the 2012 fiasco. Well worth a read.
According to Business News Americas (subscription), Shell has received approval to redevelop two mature oil fields off Brazil’s southeast coast.
BloombergBusinessweek is reporting that Shell, which signed the first shale-gas production sharing contract in China, will trim its project in Sichuan province because of geological challenges and the area’s dense population.
“In Sichuan progress has been slower and more difficult than we might have hoped: partly geological reasons, partly some of the challenges of operating in the very highly populated agricultural region,” Shell Chief Financial Officer Simon Henry told investors today in New York. “It’s likely it will be smaller than originally envisaged.”
The same BloombergBusinessweek article also reports that according to Shell’s Upstream Americas director, Marvin Odum, “Shell plans to reduce about $500 million in capital and operating costs in North America’s exploration projects this year.”
Returning to UK issues, Ben van Beurden says he is more concerned by a potential U.K. exit from the European Union than he is by the prospect of Scottish independence.