Posts under ‘Marvin Odum’

By DAN JOLING, Associated Press – 29 June 2011

ANCHORAGE, Alaska (AP) — Shell Oil President Marvin Odum has faith that his company can develop vast reserves in the Chukchi Sea off Alaska’s northwest coast. But he’d like to get on with exploratory drilling to tap into a resource that could be crucial to meeting the country’s energy needs.

“That’s an area where working in Alaska has, frankly, been disappointing to us as a company,” Odum said in an interview with The Associated Press. “It has taken much longer that we originally thought it would.”

Shell Oil Co. spent $2.1 billion on Chukchi leases in 2008 but has yet to drill an exploratory well. The Houston-based subsidiary of Royal Dutch Shell PLC has been stymied by an appeal of an Environmental Protection Agency clean air permit, a lawsuit that challenged the legitimacy of the lease sale, and a determination by federal regulators to move slowly in the Arctic after the blowout of BP’s well in the Gulf of Mexico.

Shell says it has spent more than $3.5 billion drilling in the Arctic, including the Beaufort Sea off Alaska’s north coast. The potential prize is the estimated 26.6 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas in the Alaska outer continental shelf.

That’s nearly four times the amount of oil the U.S. consumes in a year, and more than five times the nation’s annual gas consumption.

Information the company has accumulated over the last five years, including three-dimensional seismic data, has increased Shell’s enthusiasm for Arctic drilling, Odum said.

But drilling is bitterly opposed by some Alaska Native groups who fear a spill — and even exploration itself — will hurt their ability to harvest the bounty of the ocean waters, from whales to walrus and ice seals.

Environmental groups have challenged the legitimacy of the Chukchi sale in court, claiming the former federal Minerals Management Service failed to conduct adequate environmental studies. They question oil companies’ ability to safely operate or clean up a spill in the region’s notorious harsh region, where waters are frozen or ice-choked most of the year.

Odum said Shell recognizes the challenges and can meet them.

“What we deal with in the Chukchi is the remoteness,” he said. “We deal with the fact that we have extreme temperatures, and some of the environmental factors are fairly extreme. But the technology that we have now to do it is absolute.”

Exploration wells must be drilled to confirm accumulations of Chukchi oil and gas, he said, but that’s just the start of Shell’s planned investment. The company must assess the economics and make a development plan to move oil to shore and then roughly 400 miles to the trans-Alaska pipeline system. That underscores what Shell believes is available in the Chukchi.

“With these huge investments, what makes that work is the fact that we think the resources are very, very large, therefore strategically important to the country, and of course to the state of Alaska, and that those will be sufficient to make the economics of this development work,” he said.

Shell hopes to drill six exploratory wells in the Chukchi during the short summer open water drilling season and four in the Beaufort over the next two years.

A federal Arctic offshore drilling coordinator would help, Odum said.

“We have a number of different agencies in our government that are tasked with supplying permits to move this kind of process forward. And those are independent agencies. So what we lack in this system is, we lack a coordination, if you will, of agencies that can work together, that can share data, that can do this more efficiently,” he said.

He can understand why laypeople compare the Gulf of Mexico and Arctic waters. From an industry expert’s perspective, the two are not related because of differences in drilling depth, water depth and pressure in the wells, he said.

Odum said exploratory drilling should have been allowed this year.

“The system we had set up for 2011 was absolutely prepared, from all environmental protection and exceeding regulatory standards, no matter how you look at it, to do that drilling,” he said.

But Shell hopes the disputes will be resolved so it can drill next summer. The air permit appeal may be nearing completion and the company is awaiting a judge’s ruling on whether sufficient environmental work has been done, but Interior Secretary Ken Salazar has said he will proceed with caution on any decision to lift the government’s Arctic drilling suspension.

The drilling areas are more than 1,000 miles from the nearest Coast Guard base on Kodiak Island, and Shell would operate without the resources available in the gulf if it has to cap a blowout or respond to a spill.

Odum insists the company is prepared. The exploratory drilling plan calls for upward of a dozen vessels accompanying the drilling ship, a second drilling ship to relieve pressure in a blowout well, an oil spill containment system that could cap a blowout, and additional staged resources.

“The very fact that it’s remote, it is the very fact that there is not a lot of infrastructure in place, that defines how we approach this as a business and as a company,” Odum said. “That is, we take everything with us.”

The consequence of having to be prepared for every scenario, he said, is that everything Shell would need will be immediately available if it experiences a problem.

Odum also dismissed perceived gaps in scientific data related to drilling’s effects in Arctic offshore waters. Much has been done and more will be compiled as Shell moves forward, he said.

“What I lean on is that there’s been 5,000 studies and half a billion dollars or more spent on studies on exactly these issues in the Alaskan Arctic,” Odum said. “It’s probably the most heavily studied and analyzed area that this country has. So there’s a tremendous amount of information to look at and utilize. So when you ask if I’m concerned about it, it’s not a concern but it is a point of emphasis for me that that data be recognized and used, because I think virtually everything is already there.”

Copyright © 2011 The Associated Press. All rights reserved.

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(Reuters) – The Gulf of Mexico remains a “very strategically important” area for Royal Dutch Shell’s (RDSa.L) Americas arm both in terms of exploration and the company’s consideration of buying more assets, Marvin Odum, president of Shell Oil Co, said on Monday.

We’ve been growing our business there, mostly through exploration,” Odum said at the Reuters Global Energy and Climate Summit. “If something becomes available, I guarantee we’ll be looking at it.”

Odum also said it was an opportune time to acquire more dry shale gas acreage despite low natural gas prices, as more drilling can help find “sweet spots” to improve Shell’s overall portfolio.

Odum said he expects “imminent” approval from federal regulators for a drilling permit in the company’s Appomattox field in the deepwater Gulf, and the company’s Perdido oil and gas platform is producing about 40 percent of its capacity of 100,000 barrels per day of oil from five wells.

(Reporting by Kristen Hays; Editing by Matthew Lewis)

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By Katarzyna Klimasinska

June 9 (Bloomberg) — U.S. approval of a Royal Dutch Shell Plc oil exploration plan for the deep waters of the Gulf of Mexico is illegal and should be withdrawn, environmental groups led by the Natural Resources Defense Council said in petitions.

The NRDC and Oakland, California-based Earthjustice, in filings today in the U.S. Court of Appeals in Atlanta, said the May 10 action by the Bureau of Ocean Energy Management, Regulation and Enforcement violates environmental laws.

Earthjustice’s petition included Gulf Restoration Network, Florida Wildlife Federation and Sierra Club Inc. The New York- based NRDC was joined by Defenders of Wildlife and the Center for Biological Diversity, the group said in an e-mailed statement.

Shell was first to win approval for its deep-water drilling plans after passing U.S. environmental reviews adopted following the BP Plc oil spill, triggered by an explosion aboard the Deepwater Horizon drilling rig. The Hague-based Shell was cleared to drill five exploratory wells in waters as deep as 7,259 feet (2,213 meters), 72 miles off the Louisiana coast.

“It’s unsafe to resume drilling in the Gulf given what we’ve learned from the Deepwater Horizon incident,” David Pettit, senior attorney at the NRDC, said in a phone interview.

The Bureau of Ocean Energy Management had no comment, said Melissa Schwartz, a spokeswoman.

“We will fully assist the government in defending this plan,” Bill Tanner, a Shell spokesman, said in an e-mail.

BP’s well exploded on April 20, 2010, killing 11 people, destroying the rig, and spewing crude for 87 days.

“After decades of responsible offshore drilling operations in environments around the globe, this approval is further evidence of Shell’s expertise and confidence in the offshore,” Marvin Odum, the president of Shell’s U.S. operations, said on May 11, following the approval of the plan NRDC is now disputing.

–With assistance from Laurence Viele Davidson in Atlanta and Margaret Cronin Fisk in Detroit. Editors: Steve Geimann, Michael Hytha

To contact the reporter on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Larry Liebert at lliebert@bloomberg.net

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HOUSTON, June 9 (UPI) — Shell said expected production at its Cardamom oil and gas field in the deep waters of the Gulf of Mexico could reach 50,000 barrels of oil equivalent per day.

Marvin Odum, upstream director for Shell operations in the Americas, said the estimate bodes well for energy supplies for the United States.

“It will also secure employment for more offshore workers,” he added.

Cardamom is expected to reach an eventual peak production rate of 50,000 barrels of oil equivalent per day. More than 140 million boe is expected from the project over its lifetime.

Shell’s announcement follows similar declarations from Exxon Mobil, which announced discoveries while drilling in 7,000 feet of water south of Louisiana that have a recoverable resource potential of more than 700 million barrels of oil equivalent.

“This is one of the largest discoveries in the Gulf of Mexico in the last decade,” the company said.

Deep-water exploration is under scrutiny following last year’s oil disaster in the gulf. Republican lawmakers pushing for more access to domestic reserves praised the latest finds, however.

“The prospect of new American-made energy supplies means less pain at the pump for American families and more American jobs,” U.S. Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, said in a statement.

© 2011 United Press International, Inc. All Rights Reserved.

June 8, 2011

LONDON -(Dow Jones)- Royal Dutch Shell PLC (RDSA.LN) has taken the final investment decision for the multi-billion dollar development of its deepwater Cardamom oil and gas field in the Gulf of Mexico, the Anglo-Dutch energy company said Wednesday.

“This is another sizable deep-water investment by Shell that strengthens energy supplies to the USA. It will also secure employment for more offshore workers,” said Shell Upstream Americas Director Marvin Odum. (Right)

(END) Dow Jones Newswires
06-08-111427ET
Copyright (c) 2011 Dow Jones & Company, Inc.

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By Eduard Gismatullin – May 19, 2011 2:37 PM GMT+0100

Royal Dutch Shell Plc (RDSA), Europe’s largest oil company, said a $19 billion investment in Qatar may prove that abundant natural gas coaxed from shale rocks across the U.S. could be converted into diesel and jet fuel.

Shell, which is completing the world’s largest gas-to- liquids plant in Qatar, could use the technology on a smaller scale in the U.S. if capital costs can be reduced, Marvin Odum, head of Shell in the Americas, said in an interview in London. The technology uses catalysts to turn natural gas into jet fuel, diesel and other liquids.

The development of shale fields made the U.S. the world’s largest gas producer in 2009 and caused a slump in prices. Today’s price of $4.18 is equivalent to about $24 a barrel of crude. Oil is trading at about $100 a barrel in New York.

“It’s an important thing for the U.S. that they found this huge shale gas resource” to reduce dependence on oil imports, said Hannes Loacker, an analyst with Raiffeisen Bank AG in Vienna. “The longer gas prices will stay at such a low level, the more will happen” because producers will look for ways to gain from mispricing.

Oil, Gas Arbitrage

U.S. gas producers are examining different ways to benefit from the arbitrage between oil and gas prices. In the nearer term, compressed and liquefied gas is likely to play a greater role as a transportation fuel, Odum said. Exports of liquefied natural gas by ship are possible from North America, more likely from Canada than the U.S., where there are political obstacles to exports, he said.

Shell expects to produce the equivalent of 400,000 barrels of gas in the Americas in 2015, double the figure in 2009, as it invests $40 billion in the region, The Hague-based company said last year.

Shale gas may account for 47 percent of total U.S. production in 2035, up from 16 percent in 2009, according to the Energy Information Administration.

Shell’s Pearl GTL plant in Qatar will start production this year and make enough diesel to fuel 160,000 cars a day when it reaches full output. It will also make kerosene and base oils.

BG Group Plc (BG/), a U.K.-based producer that has U.S. shale fields, agrees that gas-to-liquids may have a future in North America.

‘Huge Differential’

BG expects producers to find ways to benefit from “the huge differential between the cost of oil and the cost of gas,” Chief Executive Officer Frank Chapman said last week. That may help to reduce petroleum imports to the nation with the help of “middle distillate synthesis from gas.”

The U.S. government is examining at least nine proposals to allow exports of LNG produced from domestic gas. BG and Southern Union Co. (SUG) were the latest to seek permission from the Department of Energy. Companies would like to supply the fuel to Asia or Europe where prices are higher.

“There are many other proponents talking about not only exporting gas, but finding other uses for it in the U.S.,” such as chemicals and fertilizers, Chapman said. The gap between oil and gas prices will narrow over time and it “will be good for owners of substantial gas reserves.”

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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WASHINGTON, May 12, 2011 /PRNewswire/ — Statement of Marvin E. Odum President, Shell Oil Company (Photo right)

SHELL OIL COMPANY ODUM Marvin Odum, president of Shell Oil Company. (PRNewsFoto/Shell Oil Company) WASHINGTON, DC UNITED STATES

Chairman Baucus, Ranking Member Hatch, and members of the Committee:

I am Marvin Odum, president of Shell Oil Company. Shell is a global energy company, with more than 90,000 employees in more than 90 countries. Approximately 19,000 of those employees are here in the U.S. working to discover, produce, market and deliver to consumers today’s energy and tomorrow’s energy technology. Thank you for the opportunity to speak today.

I’d like to address right up front the issue that’s on many American’s minds – the rising cost of energy, particularly the cost of gasoline.

Because fuels are refined from crude oil, the biggest impact on the price of fuel is the price of crude oil.

Everything from the weather to politics and the global economy determines the price of oil and the fuels made from it. No one person, organization or industry can “set” the price for crude oil. Weak economic conditions in 2008 and 2009 lowered demand, which helped push prices down. Now, with worldwide economic recovery underway, demand is on the rise, sending prices upward.

In addition, because oil is sold in U.S. dollars throughout much of the world, when the dollar becomes weaker, it takes more dollars to buy the same amount of oil.

Stated simply, oil is a global commodity. And oil companies are price takers, not price makers.

So while we can’t predict or control the price at the pump, we do know that we can increase the stability of our energy future through a combination of efficiency gains and increased supply.

And the surest way to address a challenge of this magnitude is to focus on what we can control — using “what we know” to safeguard against what we don’t.

Without question, our government is facing significant challenges right now – in terms of economic security, energy security, and other challenges.

But when you have a deficit, be it energy or financial, your choices are quite simple– get more, or use less – and, most often, it is a combination of both that achieves the best result.

It can be tempting to assume that there is something to gain by taking more from a few. However, one must also balance the potential implications of increased industry costs on both supply and price. Alternatively, if policies are put in place to allow the energy industry to be an economic growth engine for America — developing our own resources — we would see tens of thousands of new, well paying jobs and billions of dollars in revenue for local, state and federal governments.

Some perspective:

Last year, Shell reported global earnings of $18.6 billion. We also invested some $29 billion, mostly in new projects to bring energy supply to the consumer, and spent more than $40 billion to run our businesses globally.

Last year in the Gulf of Mexico, government policies caused Shell to defer some $700 million in capital expenditures and take more than $180 million in special charges. We expect to lose an estimated 50,000 barrels of oil equivalent per day in 2011 alone. Thinking about that impact to-date, that represents lost gasoline production – just to Shell – that could have powered, on average, 633,000 cars and light trucks every day since January 1.

Here in the U.S., at the invitation of the federal government, we have invested more than $3.5 billion since 2005 to develop energy resources in Alaska. Six years later, we have been prevented from drilling a single exploration well due to the government’s inability to deliver timely permits to allow this potential new resource to be developed. During that time, we have drilled more than 400 exploration wells worldwide.

My point is this: Investments in our industry carry huge amounts of capital and risk. Policy makers must consider this when thinking about the competitiveness of the U.S. versus other regions.

The President recently acknowledged that reducing dependence on imports was a national policy imperative. We agree. The U.S. is resource-rich in many ways, especially in oil and gas. Yet, as a country we import more than 60 percent of our petroleum at a cost of more than $350 billion a year.

And the bottom line is this: if we don’t develop our own energy sources, we’ll have to accept the costs – both financial and geopolitical – of bringing it into this country from places that are less secure or less stable.

In closing, Shell is grateful for the widespread recognition in Congress of the daunting energy challenge facing the nation. Although some of our opinions differ, we all agree that it will take all possible energy sources and energy savings to meet demand.

We should also agree and acknowledge that oil and gas will remain critical sources of energy for decades to come. I urge you to consider the broad and sustained benefits of developing our own domestic resources.

Keeping this economic value here at home, we can at the same time move forward with investments in the next generation of technologies and energy solutions that will power the future.

Thank you and I look forward to your questions.

SOURCE Shell Oil Company

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May 12, 2011 9:00 A.M. ET

By Tennille Tracy Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)–As Democrats look to repeal tax breaks given to the oil and gas industry, Royal Dutch Shell PLC (RDSA, RDSA.LN, RDSB, RDSB.LN) President Marvin Odum said in congressional testimony Thursday that lawmakers may think “there is something to gain by taking more from a few,” but that they should consider the effects of higher taxes “on both supply and price” of oil.

Instead of eliminating the tax breaks, as House and Senate Democrats are proposing, Odum encourages lawmakers to expand domestic oil production to combat higher gasoline prices.

“While we can’t predict or control the price at the pump, we do know that we can increase the stability of our energy future through a combination of efficiency gains and increased supply,” Odum said in prepared remarks.

Odum is one of five top-level oil executives scheduled to make a rare appearance before Capitol Hill lawmakers Thursday. Among the other companies represented on a Senate hearing panel are Chevron Corp. (CVX)and Exxon Mobil Corp. (XOM).

The companies have become the target of legislation that eliminates billions of dollars of tax incentives given to the oil and gas industry. One such proposal, announced this week by Sen. Robert Menendez (D., N.J.) and other Democrats, repeals about $2 billion in annual incentives for the five largest companies and uses the revenue to pay down the U.S. deficit.

Thursday’s hearing is being held by the Senate Finance Committee. The head of that committee, Sen. Max Baucus (D., Mont.), is developing similar legislation that will use the revenue to promote clean energy.

The proposals have emerged as lawmakers on both sides of the aisle look to respond to high gasoline prices heading into an election year.

-By Tennille Tracy, Dow Jones Newswires; 202-862-6619; Tennille.tracy@dowjones.com

Associated Press

Oil-company executives, from left, Shell Oil President Marvin Odum; BP America Chairman H. Lamar McKay; and ConocoPhillips CEO James Mulva, testify before the Senate Finance Committee on Thursday.

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RELATED WALL STREET JOURNAL ARTICLE: Oil CEOs on the Hot Seat

Tuesday May 10, 2011

By GUY CHAZAN AND STEPHEN POWER

The White House is ratcheting up its involvement in a looming decision on whether to grant Royal Dutch Shell PLC permission to drill for oil off the coast of Alaska, raising the company’s hopes that it can secure the necessary permits for an expensive and controversial project.

In an interview, Shell’s U.S. president, Marvin Odum, said a meeting last week with senior Environmental Protection Agency officials and top energy aides to President Barack Obama left him more confident Shell would get all the permits it needs to start drilling in the Arctic seas off Alaska next year. The drilling plans have faced fierce opposition from environmental and some indigenous Alaskan groups and, a senior administration official noted, must still secure the approval of multiple federal agencies.

The White House’s increased attention to Shell comes as congressional Republicans and Democrats from oil-rich states are raising pressure on the administration to allow more domestic drilling. Amid turmoil in the Middle East, crude prices—and gasoline prices—have jumped in recent months.

At the same time, environmental groups and other Democrats in Congress want Mr. Obama to tighten regulation of deep-sea exploration in the wake of last year’s Gulf of Mexico oil spill involving BP PLC.

One area that symbolizes the competing pressures is Alaska’s coastal waters. The Chukchi and Beaufort Seas off Alaska are thought to contain 25 billion barrels of oil and 100 trillion cubic feet of natural gas—the U.S.’s second-largest hydrocarbon reserves after the Gulf of Mexico.

But despite having invested $3.5 billion in its offshore Alaska exploration program, Shell has yet to drill a single well there. Its plans have been stymied by legal challenges and regulatory hurdles, which have only grown since BP’s deepwater-well blowout last year.

The latest setback came in December, when an air-quality permit that Shell had received from the Environmental Protection Agency for temporary exploration operations was invalidated by a panel of administrative-law judges at the U.S. agency. The judges ruled that the agency hadn’t adequately analyzed how nitrogen-dioxide emissions from Shell’s operations would affect people living on Alaska’s North Slope.

Shell reacted furiously, calling the delay to its Arctic program “frustrating,” “disappointing” and “irresponsible.” Members of Congress from Alaska have also blasted the decision.

Since then, Shell’s relations with regulators have improved, especially after last Wednesday’s White House meeting. Mr. Odum said it was attended by representatives of several of the federal agencies involved in the permitting process, including the EPA, and was “the strongest indication we’ve ever had of a coordinated government approach to start drilling in Alaska.”

He said Shell presented the dates by which it needs certainty on permits in order to move ahead with its 2012 drilling plans, and “the agencies are reflecting on their ability to meet those dates.”

“My confidence in the EPA delivering the permits has gone up considerably as a result [of the meeting],” Mr. Odum said.

An EPA spokesman said “we have worked with Shell to address the concerns raised by” the judges and that all of the relevant federal agencies “are ready to continue working with the company as they seek the appropriate permits for this project.”

A senior administration official who attended the May 4 meeting said the White House often meets with businesses or other groups that have questions or concerns about navigating the regulatory process. The meeting with Shell was convened to “facilitate the conversation” between the company and the government, she said. A decision on whether to grant Shell a new air permit will be made by the EPA, not the White House, she added. The EPA’s administrator, Lisa Jackson, testified before Congress in March that she expects the agency’s analysis of the project “will clearly show that there is no public health concern here.”

“We don’t prejudge or take a position on” Shell’s project,” the administration official said. But, she added, “we’re committed to increasing domestic oil and gas supply. This is a potential resource, and we’re going to look at it.”

Conservation groups worry about the devastation an oil spill could wreak on the pristine wilderness of the Arctic and say Shell lacks the ability to respond to an oil spill in such a remote and fragile location—a claim Shell denies.

“Shell doesn’t have its permits for the simple reason that its drilling plans don’t comply with the law,” said Rebecca Noblin, Alaska director of the Center for Biological Diversity, which has challenged Shell’s proposed project. “All the attention Shell is trying to focus on EPA is really just a diversion from the fundamental issue that there is no oil-spill-response capability in the Arctic, and without that capacity there is no way for Shell to lawfully go forward with its plans.”

Mr. Odum said Shell has put in place an immediate-response capability, fully staffed and fully equipped, to deal with a 20,000 barrel-a-day spill in Alaska and also has state-of-the-art capping and containment systems on hand to cope with any discharge. The company has also emphasized that the reservoirs it is planning to drill in Alaska are in shallower waters—and at much lower pressures—than the BP well that blew out last year.

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Published: May 5, 2011 at 8:32 AM

CALGARY, Alberta, May 5 (UPI) — The expansion of a production facility processing Canadian oil sands goes a long way toward addressing global energy concerns, Shell said.

Shell announced that it started production at its Scotford expansion project that increased the capacity in the region from 100,000 barrels per day to 255,000 bpd of heavy oil from Athabasca oil sands in Canada.

“This start-up is an important milestone for our heavy oil business,” Marvin Odum, Shell Upstream Americas director, said in a statement. “And it adds new capacity from an important source of oil in a world requiring more secure energy.”

Shell’s announcement marks the first time production ensued from the expansion. The Scotford project processes heavy oil for use in refined oil products.

Oil sands in the Athabasca region of Canada are among the world’s richest deposits, though environmental groups claim exploiting the unconventional plays is harming the environment.

© 2011 United Press International, Inc. All Rights Reserved.

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