Posts under ‘BG Group’
June 23, 2016
- Eighteen months ago Shell was considering exiting shale plays and focusing on its deepwater and LNG opportunities.
- Shell’s recent analyst day presentations revealed a company that is shifting its long term focus towards shale.
- We think that going forward the offshore drilling rig companies have major long term challenges and investors need to be aware that pre-crash cash flows aren’t coming back.
For the small sliver of global oil production that U.S shale oil actually represents it certainly has been a disruptive force.
Total shale production (there is no significant amount outside of the United States) is currently somewhere around 4.5 million barrels per day.
That is not much more than four percent of total current production which checks in at over 96 million barrels per day.
By Rakesh Upadhyay – Jun 22, 2016, 5:17 PM CDT
Ben Van Beurden, Chief Executive Officer of Royal Dutch Shell has laid out an ambitious plan to overtake ExxonMobil as the number one oil company in the world.
Prior to the 1990s, Shell was the leader in total shareholder returns, however, its rivals went on a deal-making spree to gain the lead, while Shell shied away from making any acquisitions. Now, Mr. Beurden believes that Shell will be able to regain its lost glory post the acquisition of the BG group.
By Mella McEwen [email protected]: 22 June 2016
Too big. Too rigid. Not nimble enough.
Those are reasons why integrated oil companies could have a difficult time competing with independents in the unconventional shale plays that have led to a resurgence in the nation’s oil and gas industry.
Royal Dutch Shell, however, disagrees with that reasoning and this week held an event to reaffirm its commitment to the shales business, including its holdings in the Permian Basin.
Shell officials discussed how its recent $70 billion acquisition of the BG Group has impacted its outlook. The event was a mixer at Shell’s Drilling Automation & Remote Technology (DART) Center located on its Houston campus and was webcast and available by telephone.
Russia’s state-controlled gas giant Gazprom (GAZP.MM) could gain control over some of the assets that Shell (RDSa.L) acquired earlier this year from BG group, a senior Gazprom executive said in an interview.
Gazprom’s Deputy Chief Executive Alexander Medvedev said the BG holdings could be included in an asset swap deal between Gazprom and Shell that was announced last year. He did not say what the BG holdings were or where they were located.
Having turned round its North American shale business, Royal Dutch Shell (RDSa.L) is putting so-called unconventional energy at the heart of its growth plans, and believes lessons from the revamp can be applied across the company.
Greg Guidry, head of the Anglo-Dutch group’s unconventionals business, told Reuters a drive to slash costs and streamline decision-making had put his division largely on a par with leading rivals in terms of productivity and efficiency.
And now the rest of Shell could reap the benefits too.
By Staff Writer: Jun 15, 2016
Royal Dutch Shell plc (ADR) (NYSE:RDS.A) plans to further strengthen its foothold in the liquefied natural gas (LNG) market, as according to Reuters, the company will sign the Baltic LNG project deal with Russian energy giant, Gazprom in the coming days. The multi-billion dollar deal with London-based BG Group has already increased the company’s exposure to the LNG segment.
According to news sources, Shell CEO, Ben van Beurden, will sign the deal at the International Economic Forum in St. Petersburg. Russian President, Vladimir Putin, is also expected to attend the meeting.
By Rakteem Katakey: June 15, 2016
Royal Dutch Shell Plc Chief Executive Officer Ben Van Beurden spelled out his main goal last week — surpass Exxon Mobil Corp. to become the best-performing oil major.
“I am determined to get us to that number one place,” he said after outlining the company’s long-term strategy in London. “I want to create a world class investment case for Shell and our shareholders.”
There are signs Van Beurden is winning over some investors following his record $54 billion acquisition of BG Group Plc. Shell has closed the gap on Exxon for total shareholder returns, which accounts for share prices, dividend payouts and buybacks, after lagging behind for five years. Still, the Anglo-Dutch explorer trails its U.S. rival on a range of other metrics from return on capital and assets to cash flow.
LONDON | BY RON BOUSSO AND OLEG VUKMANOVIC: Sun Jun 12, 2016
Energy giants such as Royal Dutch Shell and Total are looking to build terminals and power plants in new markets to soak up the industry’s rapidly burgeoning supply.
Companies have invested billions in plants to produce liquefied natural gas (LNG) in places such as Australia and the United States.
But gas demand growth is slowing, prices are down and the LNG volumes companies are set to produce will exceed those even major buyers such as China and Japan can absorb.
That has turned attention to the downstream market and opportunities to create new markets from Ivory Coast to remote Indonesian islands by building gas-fired power plants, pipelines, regasification and storage terminals.
By Jillian Ambrose:
11 JUNE 2016 • 7:22PM
“The world is going to have to continue using fossil fuels, whether they like it or not.” There’s little disguising the defiance in the words of Exxonmobil chief Rex Tillerson.
In a Dallas concert hall, less than six months after the historic global climate deal in Paris, the long-standing leader of the world’s largest listed oil company locked horns with shareholders in an increasingly familiar battle for Big Oil.
For years, placard-wielding green activists have raised warnings that echo the financial collapse: a “carbon bubble” could leave markets reeling as trillions of dollars’ worth of existing fossil fuel assets become worthless in a low-carbon world.
Arie Goren: Jun. 9, 2016 6:14 AM ET
- In its Tuesday, June 7, investor meeting, Shell offered a very encouraging update on the company’s strategy, which sets a clear course for stronger returns and free cash flow.
- Oil prices have shown a significant rebound in the last five months. As such, we can expect much better results for Shell’s upstream operations in the forward quarters.
- Investing in a supermajor integrated oil & gas company like Royal Dutch Shell will give investors a significant price appreciation when oil prices recover along very generous dividend yielding 7.1%.
- In my view, we can learn from the company’s new strategy that the dividend is sustainable.
Shares of Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) soared in the last two days after its Chief Executive Officer Ben van Beurden provided on Tuesday, June 7, an update on the company’s strategy, that according to the company, sets a clear course for stronger returns and free cash flow. Shares of RDS.A have increased 6.43% in the last two days and shares of RDS.B have risen 6.58%.
Since the beginning of the year, RDS.A’s stock is already up 15.7% while the S&P 500 Index has increased 3.7% and the NASDAQ Composite Index has lost 0.7%. However, since the beginning of 2012, RDS.A’s stock has lost 27.5%. In this period, the S&P 500 Index has increased 68.5% and the Nasdaq Composite Index has risen 91%.
By Associated Press: June 8 at 7:20 PM
HOUSTON — Shell Oil Co. has decided not to extend its title sponsorship of the Houston Open after next year, ending the third-longest running title sponsorship on the PGA Tour.
Steve Timms, president and chief executive of the Houston Golf Association, said Shell’s decision to leave after 2017 was a function of its business environment and that the company wants to stay involved in some capacity.
“We’re proud as heck of what will be 26 years of a long-running sponsorship,” Timms said Wednesday. “This will present some opportunities for us. We’re confident in our property. We’re in a big market and we feel good about it.”
By MARK WILLIAMSON: 8 June 2016
ROYAL Dutch Shell has given a further signal it will retreat from the North Sea as the company said it will continue with deep cuts in spending amid the crude price plunge.
Chief executive Ben van Beurden said the oil and gas giant will focus investment on the kind of big fields which will generate high returns over the long term and which the company has made clear are in short supply in the North Sea.
Shell is investing heavily in two giant fields West of Shetland with BP, which are due to come onstream in coming months and could be in production for years, but has nothing similar in the pipeline.
By IAN BICKIS: The Canadian Press: Tues., June 7, 2016
CALGARY—Royal Dutch Shell says it’s shifting away from growing its liquefied natural gas business, a move that raises fresh doubts about the future of its proposed LNG Canada project in Kitimat, B.C.
The company said Tuesday the pace of new investment in LNG will slow as it moderates growth and prioritizes cash flow generation and returns on existing projects.
Shell said while its integrated gas business was previously a “growth priority,” it has now reached a critical mass after completing the acquisition of gas giant BG Group in February.
By DAVID SHAND: PUBLISHED: 00:03, Wed, Jun 8, 2016
The company set out its plans to create a “world class investment case” for shareholders following its £35billion takeover of fellow FTSE 100 oil and gas giant BG Group, which will include more asset sales and cost-cutting.
In its presentation to investors, Shell said it would squeeze an extra $1billion (£690million) in savings from the BG deal from an earlier $3.5billion forecast.
It aims to sell 10 per cent of its oil and gas production by exiting operations in up to 10 countries.
By PAUL J. DAVIES: June 7, 2016 11:48 a.m. ET
For Royal Dutch Shell , austerity is tricky. The Anglo-Dutch oil and gas group is doing almost everything it can to make its finances work. The trouble for investors is that it still may not be enough.
Shell has found more cost savings more quickly from its takeover of BG Group and is slashing its investment plans back to almost the minimum needed to keep producing. But without a recovery in oil and gas prices it will struggle to balance its long-term prospects with near-term promises.
By Chris Hughes: June 7, 2016
Shell is learning not to waste a crisis.
The Anglo-Dutch oil major is pulling on every lever to deal with the consequences of agreeing a takeover of rival BG Group just before the oil price collapsed last year. Shareholders can only hope that the zeal it now shows for running a tight ship will endure once the company is on a surer footing.
The $54 billion cash-and-shares purchase of BG was completed in the first quarter, just as the oil price hit rock bottom. As of March 31, Shell’s net borrowings had shot up from $27 billion to $70 billion. Operating cash flow on a 12-month rolling basis was $23 billion — too low for a company then targeting $33 billion of annual capital expenditure and accustomed to paying $10 billion of cash dividends annually, even allowing for a contribution from BG. No wonder analysts have been penciling in dividend cuts.
RUSSELL LYNCH: 7 June 2016
Royal Dutch Shell boss Ben van Beurden delivered a $1 billion (£688 million) present to the City today as he pumped up more savings from the oil major’s $54 billion mega-merger with rival BG Group.
The shares rose almost 3%, or 48p, to 1749p as the cost-cutting drive, which has stepped up a gear since the deal completed in January, now promises $4.5 billion in savings by 2018.
That compares with the $3.5 billion previously estimated.
The latest savings will not involve further job cuts on top of the extra 2200 announced two weeks ago by the firm, which took the total number of jobs shed through the merger to at least 12,500.
Holly Ellyatt | Stephen Sedgwick: 7 June 2016
Royal Dutch Shell‘s plans to sell off assets and pull out of up to 10 countries are on track, the oil major’s chief executive told CNBC on Tuesday, putting to bed rumors of a spin-off of non-core assets into a “Baby Shell.”
On the company’s capital markets day in London, Shell in a statement said that it was taking action to deliver on lower costs, lower spending. asset sales and “profitable new projects.”
In terms of asset sales, the company confirmed these were expected to total $30 billion for the 2016-2018 period.
By Rakteem Katakey and Ryan Chilcote: June 7, 2016
Royal Dutch Shell Plc cut spending plans further and promised increased savings following its record purchase of BG Group Plc, as Europe’s largest oil company continues to adjust to the slump in energy prices.
Shell will spend $29 billion this year, it said Tuesday. That compares with a May forecast for capital expenditure “trending toward” $30 billion, which was itself down from an earlier projection of $33 billion. Synergies from the BG acquisition will provide $4.5 billion in savings in 2018, up from an earlier estimate of $3.5 billion.
Kiran Stacey, Energy Correspondent: June 7, 2016 8.03am
Royal Dutch Shell is aiming to make steeper cost cuts than previously planned as a result of its £35bn takeover of rival BG Group, the company has said.
The international oil company gave investors an update on its long-term strategy on Tuesday, in which it tried to reassure the market about the amount of debt it has taken on as a result of the purchase, which was completed in February.
By Jon Yeomans: 7 JUNE 2016 • 9:33AM
Oil giant Shell is targeting yet more cost savings as it looks to pay down debt and protect its dividend in an era of lower oil prices.
The Anglo Dutch giant said today capital spending would be in the range of $25-$30bn a year to 2020. For 2016 it will be $29bn, down from a forecast “trending toward” $30bn, which was itself down from an earlier projection of $33bn.
The company said this spending could go even lower if oil prices sink below their current levels, but crucially would not go higher if oil surges. Crude has stabilised at around $50 a barrel, after hitting a 12-year low of $28 a barrel in January. It was trading at more than $100 two years ago.
Royal Dutch Shell (RDSa.L) will exit oil and gas operations in up to 10 countries in a drive to deepen cost cuts and narrow its focus following its $54 billion acquisition of BG Group.
Presenting its strategy following the close of that deal in February, the Anglo-Dutch company outlined plans to target annual spending of $25 billion to $30 billion until the end of the decade.
It lowered its planned 2016 capex to $29 billion in a third cut from an initial $35 billion.
Shell also raised its target for savings from the integration of BG to $4.5 billion, up $1 billion from previous guidance.
Chief Executive Officer Ben van Beurden hopes the new cuts will help boost Shell’s shares, which have underperformed rivals since the BG deal was announced in April 2015.
By: Carl Surran, SA News Editor: Jun 6, 2016
Shell is planning to sell off a large chunk of its portfolio because the BG deal significantly increases the combined group’s debt load, but people involved in the sale process tell FT that while that timeline is still in place, the deadline could be pushed back if Shell cannot secure what it thinks the assets are worth.
By Peter Stephens – Monday, 6 June, 2016
With the price of oil having risen from $28 per barrel earlier this year to around $50 per barrel, many investors may feel as though the worst is now over. Certainly, such a rapid gain in the price of any asset indicates a step change in investor sentiment and looking ahead, the price of oil could rise yet further. However, with there being a major imbalance between the supply of and demand for oil, its price could easily come under further pressure in the short-to-medium term.
In such a situation, it may be prudent for investors to hold shares in oil stocks with sound financial backgrounds. One such company is Shell (LSE: RDSB), with it having a strong balance sheet and excellent cash flow. In fact, evidence of Shell’s financial strength can be seen in its acquisition of BG Group during the oil crisis. This indicates that Shell is very confident in its ability to survive a low-oil-price environment. And with it having a debt-to-equity ratio of just 41% even after the acquisition of BG, it seems capable of making further acquisitions in future.
Monday, 06 Jun 2016, 09:25 BST
Royal Dutch Shell (LON:RDSA) is set to lay out plans for deeper cost cuts and a potential delay in its asset sale programme when it updates investors on its strategy tomorrow, The Sunday Times has revealed. The update will come as the group’s chief executive Ben van Beurden is under increasing pressure to justify the £35-billion acquisition of BG Group which completed earlier this year.
Shell’s share price has advanced in London this morning, having gained 1.55 percent to 1,702.00p as of 08:54 BST, and outperforming the benchmark FTSE 100 index which currently stands 0.73 percent higher at 6,254.90 points. The Anglo-Dutch group’s shares have lost some 10 percent of their value over the past year, but are up more than 11 percent in the year-to-date.
Written by Keith Findlay – 06/06/2016 7:09 am
Oil giant Shell may be about to announce further cost cutting and a possible delay to its plans to offload assets, a report said yesterday.
Chief executive Ben van Beurden is under “increasing pressure” to justify the firm’s £35billion takeover of BG Group in the middle of a severe oil and gas industry slump, it added.
Shell is holding a capital markets day for investors tomorrow and it is thought it may update on its sale plans and fresh cost-cutting then.
Last month, Shell chief financial officer Simon Henry said cost levels in the North Sea needed to come down “substantially”.
Action already taken to integrate BG within Shell’s operations, including job cuts, were “probably about it for now” but he did not rule out further headcount reductions.
Danny Fortson: June 5 2016, 12:01am, The Sunday Times
Shell could show fresh signs of financial strain from its takeover of rival BG this week as it lays out plans for deeper cost-cuts and a potential delay in the mammoth asset sale launched by the oil giant to help pay for the £35bn deal.
Chief executive Ben van Beurden is under increasing pressure to justify the blockbuster acquisition, which he pulled off despite the plunging oil price.
Crude closed on Friday at $49 a barrel, less than half its 2014 high.
However, it is perhaps best known in the West, as the operator of the endlessly controversial Corrib Gas project; but as its long history around the world has shown, controversy is no stranger.
John Lynch: PUBLISHED 30/05/2016 | 02:30
The latest recession in the oil sector has thrown up some truly remarkable business paradoxes.
Imagine, if you can, a company which suffers a $200bn plunge in revenues and sees its operating profits collapse by 93pc.
Imagine that company surviving such a life-threatening trauma but being resilient enough to get stuck into the acquisition of a serious competitor.
Well, that’s been the precise up-to-date experience of Royal Dutch Shell (Shell). And the rival it picked up amidst all its woes is BG plc. But then oil companies are a law unto themselves and some can afford to ship revenue and profitability damage, which would be fatal for most other corporations.
By GREG CHRISTISON: PUBLISHED: 22:22, Wed, May 25, 2016
The move, announced yesterday, is a result of the firm’s £35billion merger with the BG Group and the prolonged slump in oil prices.
A total of 475 positions will be lost from the company’s UK and Ireland upstream business, which deals primarily with exploration, by the end of the year.
All job losses are expected to affect Scotland – home to around 2,200 Shell employees – with most coming from the firm’s Aberdeen headquarters. Around 40 offshore posts will be cut and there will also be losses at St Fergus Gas Terminal, in Aberdeenshire, and the firm’s plant at Mossmorran, in Fife.
The cuts are mainly due to Shell’s takeover of oil and gas exploration firm BG Group and prolonged low oil prices, it said.
In February, the firm posted its steepest fall in full-year earnings for 13 years.
“Despite the improvements that we have made to our business, current market conditions remain challenging,” said Shell UK and Ireland vice president Paul Goodfellow.
“Our integration with BG provides an opportunity to accelerate our performance in this ‘lower for longer’ environment.
By Rakteem Katakey: May 25, 2016 — 11:19 AM BST
Royal Dutch Shell Plc will cut 2,200 more jobs, taking the total tally of losses to 12,500 from 2015 to 2016 as the world’s second-biggest oil company continues to adjust to the slump in prices.
At least 5,000 jobs will be cut this year, the company said in an e-mailed statement. These reductions are in response to oil prices staying “lower for longer,” and as a result of the acquisition of BG Group Plc earlier this year, said Paul Goodfellow, Shell’s vice president for the U.K. and Ireland.
By THE ASSOCIATED PRESS: LONDON — May 25, 2016, 6:08 AM ET
Anglo-Dutch oil company Royal Dutch Shell says it will trim at least 2,200 jobs globally amid challenging times in the oil industry.
The losses are in addition to cuts already being implemented because of the energy company’s merger with BG. The losses will include some 475 positions in the North Sea.
Oil companies around the world are slashing jobs and postponing investments to adjust to lower energy prices. Prices have fallen because production remains high even as slower economic growth, particularly in China, reduces consumption.
Chris Foote: Wed 25 May 2016
Dutch oil giant Shell plans to cut nearly 500 jobs from its North Sea workforce.
The announcement on Wednesday came as the result of a £47bn merger with the BG Group.
All 475 jobs are expected to be lost by the end of the year, along with 4500 others worldwide.
It is believed to be one of the largest announcements of North Sea job losses in recent years.
UK and Ireland Shell vice-president Paul Goodfellow said: “We’re continuing the improvement journey we’ve been on to create a competitive and sustainable business in the North Sea.
Questions raised over impartiality of Shell’s auditor as it emerges they also worked for takeover rival BG Group
By LAURA CHESTERS FOR THE DAILY MAIL: PUBLISHED: 22:53, 24 May 2016
Royal Dutch Shell is facing allegations that the firm which signs off its accounts is not impartial.
A leading investor yesterday raised concerns that EY, which has been appointed as auditor of the oil supermajor, had a conflict of interest because it had checked the books of BG Group ahead of its £36billion merger with Shell.
Standard Life, which raised the objection, said it had it had already voiced concerns about conflicts of interest at the Shell annual general meeting last year and said that it voted against the appointment this year and was ‘disappointed’ with Shell’s decision to select EY.
Jillian Ambrose: 24 MAY 2016 • 3:17PM
Shell shareholders have approved plans to pay boss Ben Van Beurden £4.3m despite calls from top proxy advisors to vote against his bonus ahead of the oil major’s AGM.
Investors voted 85.83pc in favour of the payout at the meeting in The Hague today.
Mr Van Beurden’s pay packet includes a salary of £1.4m, a bonus of £3.5m, and a pension of £441,000 for 2015, despite Shell reporting its steepest losses in 13 years and a planned job cull of 10,000. He has also received shares worth £9.7m, which vest in three years if he meets key performance targets.
Investors say Shell has failed to fully address the impact of lower oil & gas demand due to new technologies
Coalition says Shell’s climate change management could have a bearing on executive pay
Philip Waller: 23 May 2016
The Aiming for A coalition says Shell has failed to fully address the impact of reduced demand for oil and gas because of new technologies such as carbon capture and electric cars.
The group acknowledged improvements made by the company, but demanded more risk and strategy disclosure.
It said investors with assets worth US$5.05trln, including Rathbone Greenbank Investments, will provide Shell with direct feedback on progress at Shell’s AGM on Tuesday.
BOSSES at Royal Dutch Shell will face shareholders at the group’s annual general meeting tomorrow amid concern over the chief executive’s “unacceptable” £4million pay deal.
Investors have been urged to vote against the firm’s remuneration report in protest at Ben van Beurden’s pay for 2015, even though it marked a significant reduction from the £18.6million he was paid in 2014 in the wake of plunging profits.
Shell’s latest annual report revealed boss Mr van Beurden’s total pay for last year was £4.3million – a 77 per cent fall on 2014 after the tumbling cost of crude took its toll on the group.
By Micheal Kaufman: May 20, 2016 at 2:09 pm EST
The energy sector has been badly affected due to substantial decline in oil and gas price. This has forced companies to implement counter steps such as capital expenditure reduction and asset disposals.
Royal Dutch Shell plc (ADR) (NYSE:RDS.A), a major oil company, is reportedly looking for buyers for its North Sea assets. The assets had been mainly bought during its multibillion takeover of BG Group.
According to a report by Bloomberg, the company is in talks with chemical producers including privately owned Neptune Oil and Gas and Ineos Group AG, established by former CEO of Centrica Sam Laidlaw. Shell could look to sell a package of assets and want to gauge buyers’ sentiments before formal assets disposals process is launched. With no final decision been made yet, there is also a possibility that the assets might be retained.
Royal Dutch Shell reportedly testing the waters for its $30 billion divestiture plan.
Most of the assets are located in the North Sea.
What will potential buyers be looking at?
Weak selling environment could result in company retaining some assets.
Gary Bourgeault: May 19, 2016 5:35 PM ET
After its $54 billion acquisition of BG Group, Royal Dutch Shell Plc (NYSE:RDS.A) (NYSE:RDS.B) had its credit rating cut after the huge increase in debt. Now it has reportedly entered into talks with interested parties in order to raise about $30 billion from the sale of assets, according to Bloomberg, citing sources not wanting to be identified.
The report said the bulk of the assets in question are from the BG acquisition, with the majority of the assets located in the high-cost North Sea region. In March, other unidentified people said Shell was also shopping assets in India and Trinidad and Tobago, along with the U.S. pipelines.
…investors will be left holding underperforming oil stocks, whereas oil company CEOs will continue to reward themselves with fat paychecks, disregarding shareholder’s sentiments.
By RAKESH UPADHYAY: May 19, 2016
The massive revolt against the pay of BP’s chief executive, Bob Dudley, where almost 60 percent of the shareholders rejected the £14m (US$20 million) pay package is a stern warning to oil companies that investors aren’t pleased with the gaping disconnect between performance and pay structure.
Similarly, Royal Dutch Shell CEO Ben Van Beurden’s 2015 pay package, including pension and tax equalization of 5.576 million euros (US$6.1 million), is likely to face resistance from shareholders as two shareholder-advisory firms have urged them to oppose the CEO’s pay.
Royal Dutch Shell Plc is in talks with potential buyers for some North Sea assets, mostly fields it got this year as part of the record acquisition of BG Group Plc, according to people familiar with the matter.
The Anglo-Dutch energy giant has been in talks with companies including privately held chemical producer Ineos Group AG and Neptune Oil & Gas, set up by former Centrica Plc chief Sam Laidlaw, the people said, asking not to be identified as the information is private. Shell is seeking to sell a package of assets and is talking with companies to gauge their interest before a formal sale process is launched, the people said. No final decision has been made and Shell may decide to retain the properties, they said.
Casey Hoerth: May 18, 2016
- Management decreased operating expenses 20% year on year in the first quarter.
- However, record low oil and gas prices have caused a large cash flow gap in Q1.
- Results should improve in coming quarters, but I still do not expect Shell to become cash flow neutral.
- I believe the dividend’s days are numbered, even with crude at $49 per barrel.
Upstream energy companies have taken quite a beating over the first quarter of 2016, thanks to record low crude oil prices. Brent Crude hit its $31 low back in January, and as earnings results came in over the last couple weeks, it became readily obvious to me that the carnage was widespread. Even the big integrated names took it on the chin, financially.
Royal Dutch Shell (NYSE:RDS.A) is no exception. Shell has adamantly clung to its dividend since the downturn started, and the company’s balance sheet has suffered as a result. On April 15th Moody’s downgraded Shell from Aa1 to Aa2, and outlook remains negative. It’s not too hard to see why that is.
Rakteem Katakey: May 17, 2016
Two shareholder-advisory firms recommended investors vote against the Royal Dutch Shell Plc Chief Executive Officer Ben Van Beurden’s pay, saying his bonus is “excessive.” A third adviser said shareholders should give “qualified support.”
Van Beurden’s annual bonus, equivalent to 245 percent of his salary last year, was not acceptable, Pensions & Investment Research Consultants Ltd. said in an e-mail on Tuesday. Advisory firm Glass Lewis also said shareholders should oppose the pay deal.
May 17, 2016
Royal Dutch Shell plc (NYSE:RDS.A) is divesting US$40 billion in non-core assets in its attempt to cut capital expenditures and raise cash in a desperate attempt to right its balance sheet wrongs after its takeover of BG Group plc earlier this year left it strapped for cash and laden with nearly US$81 billion worth of debt.
The costly merger at a time of depressed oil prices has rendered Shell the largest publicly owned company in the UK and the largest producer of liquefied natural gas (LNG) in the world.
By Geoffrey Smith: MAY 16, 2016
Royal Dutch Shell is creating a new unit specially for renewables and alternative energy, but it continues to insist that its current business of burning hydrocarbons is under no threat from global policies to mitigate climate change.
The company told investors last week that it will combine its modest operations in green energy—biofuels, wind and solar technologies—into a business unit called “new energies” under its natural gas business. It will go public with the idea in June, according to The Guardian.
Cheap oil crimping your spending plans? Sitting on a bunch of valuable upstream oil assets that could be monetized? How about a mammoth IPO? No, not Saudi Arabia. I’m talking about Royal Dutch Shell.
Shell is Europe’s third-biggest company by market value. But after the $54 billion acquisition of BG Group, its net debt is by far the largest: an eye-watering $70 billion.
Shell’s net debt is the largest of any company in western Europe
CLICK ON IMAGE TO ENLARGE
The Anglo-Dutch company says debt is likely “to go up before it goes down” and its reduction is “priority number one”. With credit-rating agencies on its case, Shell has to deliver on a pledge to divest $30 billion of non-core assets within three years.
By DREW HINSHAW in Kigali, Rwanda, and SARAH KENT in London: May 12, 2016
Royal Dutch Shell PLC is looking to sell oil blocks in Gabon, the country’s president said, as the company’s mammoth divestment plan threatens a Central African nation already hard hit by crashing crude prices.
Shell is in the process of selling off $30 billion of assets in the wake of its roughly $50 billion acquisition of BG Group PLC earlier this year. The deal gives the Anglo-Dutch oil major a strong position in the fast-growing liquefied-natural-gas market and lucrative deep-water blocks offshore Brazil, but investments that don’t fit within those core areas are likely to come under serious scrutiny as the company looks for cash to bring down its debt level.
“The peer group of four companies that Shell uses to benchmark its long-term incentive plans (L-tips) is too narrow and we remain concerned about the overly generous senior management pension plans.”
However, Royal London, which owns nearly £1bn of shares in Shell, said it acknowledged that the company had notched up several successes, including the completion of its £35bn takeover of BG.
Mr van Beurden stands to take home a salary of £1.4m, bonus of £3.5m, and pension of £441,000 for 2015. He also received shares worth £9.7m, which vest in three years if he hits a series of targets.
Royal Dutch Shell plc (ADR) (NYSE:RDS.A) has faced huge criticism from Glass Lewis, a shareholder advisory firm to award its CEO Ben Van Beurden with a huge bonus in 2015. The shareholder advisory firm further persuaded the shareholders of the oil giant to cast their vote against the payment plans of the company.
As reported by the Wall Street Journal, Glass Lewis said in a report: “We remain concerned by the disconnect between bonus payouts and financial performance. We find it troubling that the CEO continues to receive payouts at just short of maximum while the company’s financials deteriorate.”