Feb. 19 (Bloomberg) — Arrow Energy Ltd., Royal Dutch Shell Plc’s coal-seam gas partner in Australia, won government approval to build a pipeline to the proposed Fisherman’s Landing liquefied natural gas plant in the state of Queensland.

By Alexis Xydias

Feb. 19 (Bloomberg) — Royal Dutch Shell Plc shares are a “trading buy” before the company uptades investors on its strategy on March 16, analysts at Credit Suisse Group AG wrote in a report today.

“We argue that the market remains keen to call the ‘turn’ in Shell after seven years of production decline and operational struggles, and that the annual strategy update conducted by Chief Executive Officer Voser in his sophomore year in charge will, rightly or wrongly, be viewed as a catalyst in this turnaround process,” the note said.

Shell’s stock remains rated “neutral” at Credit Suisse.

To contact the editor responsible for this story: Alexis Xydias at +44-20-7073-3372 or axydias@bloomberg.net

SOURCE ARTICLE

Bloomberg February 04, 2010, 03:40 AM EST

By Fred Pals

Feb. 4 (Bloomberg) — Royal Dutch Shell Plc, which vies with BP Plc as Europe’s biggest oil company, laid out plans for 1,000 extra job cuts and savings of $1 billion this year because of a “challenging” outlook for refining.

Earnings excluding one-time items and gains or losses from inventories fell 28 percent in the fourth quarter to $2.8 billion from the year-earlier period. They matched the $2.88 billion median estimate of 14 analysts surveyed by Bloomberg.

Chief Executive Officer Peter Voser, who has placed 15 percent of Shell’s refining capacity up for review, said he isn’t betting on a “quick” recovery and the outlook for 2010 is “uncertain.” Oil prices had their biggest annual gain since 1999 last year, keeping refining margins under pressure as the recession weighed on fuel demand.

“Refining is struggling a lot and it is worse than we had expected,” Gudmund Halle Isfeldt, an Oslo-based analyst at DnB Nor Markets, said in a telephone interview.

Net income of $1.96 billion in the fourth quarter compared with a loss of $2.81 billion a year ago, The Hague-based Shell said in a statement today.

BP, which warned earlier this week that the recovery will be “slow and gradual,” posted net income of $4.3 billion in the final quarter of 2009. Exxon Mobil Corp., the largest U.S. company, posted a fifth straight drop in quarterly profit earlier this week to $6.05 billion.

‘Significant Overhang’

Shell cut 5,000 jobs last year and reduced costs by $2 billion, of which $1 billion came from in the last quarter. There is a “significant overhang” of industry refining capacity and about 560,000 barrels a day of capacity is under review, the company said.

“Downstream is facing some tough times,” Voser said in the statement. “Cost-focus is now embedded in our-day-to-day operations.”

Voser is seeking to revive production growth with new projects in Qatar, Malaysia and Brazil after output fell for a seventh year in 2009.

Shell’s class-A shares fell 1.9 percent in London trading to 1,741 pence as of 8:20 a.m. local time. The stock is up 0.6 percent in the past year, compared with a 15 percent advance for London-based BP.

Swiss-born Voser, who inherited the industry’s biggest spending program last year after taking over from Jeroen van der Veer as CEO, is no longer pinning his hopes on Nigeria, where Shell’s operations were plagued by militant attacks in recent years. Shell halted some flow stations in Nigeria earlier this week after sabotage caused a pipeline leak.

Lower Production

Production fell 3 percent to 3.152 million barrels of oil equivalent a day in 2009, from 3.248 million barrels a day in 2008. Fourth-quarter production fell 2.5 percent to 3.331 million barrels of oil equivalent a day.

Voser expects natural gas to make up more than half of Shell’s production by 2012. Gas must get “much more on the agenda as its potential role is underestimated,” Voser said in Davos last week.

Shell in December produced its first million barrels of oil from the Parque das Conchas project off the coast in Brazil. It also exceeded targets for the shipments of liquefied natural gas and crude oil from its Sakhalin-2 venture in Russia’s Far East.

Shell on Feb. 1 announced an ethanol venture with Cosan SA Industria & Comercio in Brazil. Shell will contribute assets including 2,740 service stations and as much as $1.93 billion to the 50-50 venture.

–With assistance by Eduard Gismatullin and Brian Swint in London. Editors: Stephen Cunningham, Will Kennedy.

To contact the reporter on this story: Fred Pals in Amsterdam at +31-20-589-8563 or fpals@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at +44-20-7073-3603 or wkennedy3@bloomberg.net.

SOURCE ARTICLE

Feb. 1 (Bloomberg) — Cosan SA Industria & Comercio, the world’s largest sugar-cane processor, and Royal Dutch Shell Plc said they plan to combine ethanol, sugar and distribution assets in Brazil.

BLOOMBERG INTERVIEW: DAVOS 2010:

Voser Says Shell `More Pessimistic’ on First-Half Demand

By Fred Pals

Feb. 1 (Bloomberg) — Peter Voser is using lessons from his two-year stint rescuing Swiss engineering company ABB Ltd. from near bankruptcy to turn around Royal Dutch Shell Plc by selling assets, cutting thousands of jobs and speeding up decisions.

Not only has Shell suffered six years of falling output, it’s been overtaken as Europe’s biggest energy producer in terms of market value by BP Plc for the first time since 2006.

Voser’s challenge at Shell is to take out layers of management while investing $28 billion this year to keep the company in the top league of oil majors. In recent years, Shell has struggled to maintain output levels because of lackluster exploration efforts and the company’s reluctance to do the major deals that helped rivals BP and Exxon Mobil Corp. bulk up.

“Anybody can cut costs but it’s much harder to do so in a way to build a solid foundation for the future,” said Gary Steel, a senior executive at ABB who worked alongside Voser at the Zurich-based company in the early part of the decade. “For Shell he is doing absolutely the right thing, he’s taking out the bureaucracy.”

Analysts say his efforts are paying off. In his first six months he merged units and cut about 5,000 jobs, including senior management posts. About 15 percent of Shell’s refining capacity was placed under review, while the company is also scaling back on expansion in Canadian tar sands.

Of 40 analysts following the stock, 25 have “buy” recommendations and only five have a “sell,” according to Bloomberg data. The average target price calls for an 18 percent increase in the stock over the coming year.

Operating Costs

In an interview at the World Economic Forum in Davos last week, Voser, 51 and an avid mountain-hiker and skier, said he’s willing to cut more jobs to keep operating costs down and improve Shell’s performance.

“Some of the consumption-driven demand is not coming back, so I’m rather more pessimistic for the first half of the year than I am maybe for the whole year or the second half,” he said.

Voser, who succeeded Jeroen van der Veer, inherited the industry’s biggest spending program in 2009 in the middle of a global economic crisis that forced oil companies to delay some projects and cancel others.

Voser’s efforts have yet to win over investors. Shell’s class-A shares are down 3.3 percent in the past year, compared with an 18 percent advance for London-based BP. Under Tony Hayward’s stewardship, BP has regained favor after projects came onstream and he tackled the refining problems that helped sour the last years of his predecessor, John Browne.

On Track

Hayward, who is more than two years into his own turnaround program, has already reversed a decline in output by ramping up the Thunder Horse platform in the Gulf of Mexico to more than 300,000 barrels of oil equivalent a day, and doubled a cost-savings target.

Voser is confident that The Hague-based Shell will regain its title as the region’s foremost oil producer.

“I have the clear objective to be the best,” he said in November. “It will take some time, but we’re on track to get there.”

Voser’s priority is to revive production growth with new projects in Qatar and Malaysia after output fell below 3 million barrels of oil equivalent a day. Production has been falling for six straight years and is poised to decline for a seventh. Voser has already admitted that he’s no longer pinning his hopes on Nigeria, where Shell’s operations were plagued by militant attacks in recent years.

Output Boost

He expects natural gas to make up more than half of Shell’s production by 2012. Gas must get “much more on the agenda as its potential role is underestimated,” Voser said in Davos. So far, Shell has shied away from deals on the scale of Exxon Mobil’s $31 billion acquisition of XTO Energy Inc.

“Production growth beyond 2012 will be his biggest challenge,” Gudmund Halle Isfeldt, an analyst at Oslo-based DnB Nor Markets, said in an interview. “He will be successful in simplifying Shell and the company has a higher cost-cutting potential than BP with a lot of overhead costs,” Isfeldt, who has a “buy” rating on the stock, said.

Shell’s CEO has some way to go before matching his achievements at ABB, now the world’s largest builder of electricity networks.

While chief financial officer of ABB from 2002 to 2004, he helped secure about $4 billion in asset disposals and trimmed debt after asbestos lawsuits and slowing demand threatened the company with collapse. The company returned to profit in the first quarter in 2004 after six consecutive quarterly losses.

‘Hard Restructuring’

“ABB had to go through a hard restructuring and that brought some success and Voser was part of that,” Thomas Lusetti, a senior fund manager at Verwaltungs- & Privat Bank in Zurich, said in a phone interview.

Voser quit Shell in 2002 after two decades with the company when Judith Boynton became the first outsider to be appointed chief financial officer. Boynton was demoted in 2004 following a reserves scandal after the company was forced to slash its proven reserve estimates.

Apart from two years at ABB, he’s worked at Shell in various positions since 1982.

Voser has held finance and business roles for Shell in Switzerland, Argentina, Chile and the U.K. He graduated in business administration from the University of Applied Sciences in Zurich in 1982 and in April 2005 was appointed to the board of directors of UBS AG, a post he will leave this year.

“New leaders should do new things,” Van der Veer wrote in “My A to B,” a collection of speeches, articles and letters published by Shell on his retirement. “We should make these changes work.”

–With assistance from Stanley Reed in London and Francine Lacqua in Davos. Editors: Stephen Cunningham, Guy Collins

To contact the reporter on this story: Fred Pals in Amsterdam at +31-20-589-8563 or fpals@bloomberg.net

To contact the editor responsible for this story: Guy Collins at +44-20-7330-7521 or guycollins@bloomberg.net

SOURCE ARTICLE

Shell, whose production has dropped below 3 million barrels of oil equivalent a day, has cut 5,000 jobs. It’s also reorganized management by erasing 20 percent of senior posts.

Shell May Cut More Jobs as Energy Demand Recovery Remains Muted

January 29, 2010, 07:22 AM EST

By Fred Pals and Francine Lacqua

Jan. 29 (Bloomberg) — Royal Dutch Shell Plc, Europe’s second-largest oil company, may need to cut more jobs this year to control operating costs as a recovery in energy demand waits until the second half.

“It’s normal in any business that you have to go further and you have to operate your operating expenditure in a very tough way,” Chief Executive Officer Peter Voser said in a Bloomberg Television interview in Davos, Switzerland. “As part of that, it may also mean that some more people have to go.”

Voser took over from Jeroen van der Veer in July and complained that Shell’s operations had become “too complex.” Voser merged units and cut about 5,000 jobs, including senior management posts. About 15 percent of Shell’s refining capacity was placed under review, while the company is also scaling back expansion in production from Canadian tar sands.

Swiss-born Voser inherited the industry’s biggest spending program in 2009, amounting to $32 billion, in the middle of a global economic crisis that forced oil companies to delay some projects and cancel others. Shell cut operating costs by about $1 billion in the first nine months of last year.

“I’m a little bit more cautious on the recovery,” Voser said. “We still see some effects from the stimulus package into 2010, some of the consumption-driven demand is not coming back, so I’m rather more pessimistic for the first half of the year than I am maybe for the whole year or the second half.”

Voser’s Priority

Voser’s priority is to revive production growth with new projects in Qatar and Malaysia after output fell below 3 million barrels of oil equivalent a day. Shell has spent billions of dollars on unconventional oil projects such as the gas-to- liquids plant in Qatar and is also venturing into Iraq with exploration and production deals.

Shell is looking at Venezuela, Voser said. “We are studying the bids which are now coming into the wider domain in Venezuela, and we will decide if we bid or not in the future,” he said.

Venezuela’s oil ministry is taking offers from companies that paid $2 million each to bid for the minority stakes in three new projects that will pump and refine oil from the Carabobo areas of the Orinoco Belt. The winners will get a 40 percent stake in the projects.

–Editors: Will Kennedy, John Buckley.

To contact the reporters on this story: Fred Pals in Amsterdam at +31-20-589-8563 or fpals@bloomberg.net

To contact the editor responsible for this story: Guy Collins at +44-20-7330-7521 or guycollins@bloomberg.net

SOURCE ARTICLE

Jan. 28 (Bloomberg) — Royal Dutch Shell Plc, Europe’s second-largest oil company, plans to continue record spending this year in its search for oil and gas.

“We need to keep investing throughout the cycle,” Chief Executive Officer Peter Voser said at the World Economic Forum’s annual meeting in Davos, Switzerland, today.

Investments are needed within the oil industry to increase energy supply amid increasing demand. Shell has previously said it plans to spend as much as $28 billion this year.

Voser, who took over from Jeroen van der Veer in July, inherited the industry’s biggest spending program in 2009, amounting to $32 billion, in the middle of a global economic crisis that forced oil companies to delay some projects and cancel others.

Shell is developing projects in Qatar and Malaysia to revive production growth. Record investment in 2009 let Voser expand an oil-sands venture in Canada and deep-water projects in the Gulf of Mexico and Brazil. Shell aims to increase production from existing reserves through 2020 by starting new projects that can pump more than 1 million barrels a day.

To contact the reporter on this story: Fred Pals in Amsterdam at fpals@bloomberg.net

Last Updated: January 28, 2010 04:39 EST

Jan. 27 (Bloomberg) — Arrow Energy Ltd., Royal Dutch Shell Plc’s coal-seam gas partner in Australia, rose the most in three weeks in Sydney trading after it announced a 50 percent increase in gas reserves.