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Shell News Headlines Updated 26 May 2017

Energy-Generating Kites Backed by Shell Set for Test in Scotland: Bloomberg/Quint: 26 May 2017

Power-generating kites backed by Royal Dutch Shell Plc, Schlumberger Ltd. and EON SE will start tests in the U.K. this summer, with the aim of developing a technology that could eventually replace offshore wind turbines. Kite Power Systems, known as KPS, is working on a 17-meter device that flies on air currents high above the ground and generates power by pulling at a cable. It raised 5 million pounds ($6.4 million) from the three energy giants last December. “The reason we are interested in something like this is that it has potential to reduce the cost of offshore wind in the future,” said Geert van de Wouw, managing director of Shell Technology Ventures BV.

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EARTHQUAKE WARNING TO SHELL SHAREHOLDERS

The following information is taken directly from Shell’s Annual Report for the year ended December 31, 2016

RISK FACTORS

From page 14

Production from the Groningen field in the Netherlands continues to cause earthquakes that affect local communities.
Shell and ExxonMobil are 50:50 shareholders in Nederlandse Aardolie Maatschappij B.V. (NAM), which Shell operates. An important part of NAM’s gas production comes from the onshore Groningen gas eld, in which EBN, a Dutch government entity, has a 40% interest and NAM a 60% interest. Production from the Groningen eld has caused earthquakes in the past which are expected to continue. The earthquakes have caused damage to houses and other structures in the region and complaints from the local community. Additional earthquakes could have a material adverse effect on our earnings, cash ows and nancial condition. Since 2013, the Minister of Economic Affairs (Minister) has imposed a cap on production from the Groningen eld in order to reduce the impact of the earthquakes on the neighbouring communities. In September 2016, the Minister approved the production of 24 billion cubic metres per annum from the Groningen eld until October 1, 2021. At the request of the Dutch parliament, the Minister will review annually whether new circumstances have arisen that call for a further reduction of the production. The rst such annual review is expected by October 1, 2017.

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CURRENT LITIGATION INVOLVING SHELL

The following information is taken directly from Shell’s Annual Report for the year ended December 31, 2016

PESTICIDE LITIGATION

Shell Oil Company (SOC), along with other agricultural chemical pesticide manufacturers and distributors, has been sued by public and quasi-public water purveyors alleging responsibility for groundwater contamination caused by applications of chemical pesticides. Most of these law suits assert various theories of strict liability and seek to recover actual damages, including water well treatment and remediation costs. All of the suits assert claims for punitive damages. There are approximately 30 such cases pending. Based on the claims asserted and SOC’s track record with regard to amounts paid to resolve varying claims, management does not expect that the outcome of these suits pending at December 31, 2016, will have a material impact on Shell, although no assurance can be provided.

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Shell shale oil gamble?

Shell recently announced a $300 million investment in a shale oil operation in Argentina: Shell opens treatment plant in Argentina shale play. Shell is developing controversial tight and shale oil and gas operations globally despite the significant financial and environmental considerations involved. Is this wise, or a sign of desperation? Shell is already on shaky ground with the NAM/Groningen project. There is a nice summary below of what we in the oilpatch already knew for years. Production from fracced wells (in a shale like in the US) declines very fast. A well in the Middle East in a high permeable reservoir typically declines 3-10% per year.

Shale oil declines 35-50% per year. You need to keep drilling faster and faster until you go bust…..

And when the costs are high and returns are marginal, corners will be cut and other problems start. Polluted aquifers, operators going bust so who will clean up the mess?

US shale oil will keep prices low – will it ??

Give this 5 mins – it’s fun.

Excellent website link below, with great interactive charts on how the shale wells in US are doing.

These were supposed to keep the oil price low remember?

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Court orders Shell-Exxon criminal probe over Dutch gas quakes

Financial tremors for Shell/Exxon (NAM) triggered by Dutch earthquakes

From a regular contributor

NAM has been found responsible for immaterial damage to the inhabitants of Groningen in court 2 days ago. NAM is appealing. Individuals can now claim damages to their health, due to stress caused by the earthquakes. I don’t know the exact English translation of this jargon but you get the point, NAM not only has to pay for the physical damage but also for spoiling the lives of people. 

Be prepared for many years of legal battles. The damages are very low compared to the USA but there are many people who can claim. Potential costs can be very high. Obviously, it is the shysters who will get the bulk of the money! And all the time there is pressure to reduce output from the Groningen field.

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Shell to unload $1 billion Danish stake

By An Old EP Hand

Just read Shell wants to sell the share in the DUC (Dansk Underground Consortium for ca 1 billion dollars.)

It was a well-kept secret that the DUC had a marvellous tax deal in Denmark, in the past Shell Denmark was often the number 3 or 4 cash earner for the group due to this tax deal. Only the NAM with the huge gasfields made far more money. (Norway was a lot harder on the oil companies and kept most of the proceeds themselves.)

Not sure whether the tax system has changed the last few years.

And if they can get a lot of money for it, it is a good time to leave the ship there, Maersk has little ideas how to go about milking the licence that was renewed a few years ago. They had mentally accepted the licence would come to an end when the old man Maersk McKinney Moller fixed an extension with the government. He died soon afterwards…

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Financial tremors for Shell and Exxon from Groningen earthquakes

By John Donovan

A Dutch court has just upheld a government decision to cap production at the Groningen gas field, a giant natural gas field located in Groningen province in the northeastern part of the Netherlands. The largest natural gas field in Europe.

It is operated by the Nederlandse Aardolie Maatschappij BV (NAM), a joint venture between Royal Dutch Shell and ExxonMobil, with each company owning a 50% share. 

For decades, the venture has been a money spinner for the oil giants and the Dutch government.

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Dutch court hit with 25 appeals against Groningen production cap

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Written by Reporter – 18/11/2016 

A Dutch court has received 25 appeals against the government’s decision to cap production at the Groningen gas field to an annual figure of 24 billion cubic metres from protesters who do not think it goes far enough.

A number of groups in the region asked for a steeper reduction to prevent earthquakes, which have damaged thousands of structures in the northern province.

Groningen used to supply 10% of demand in the European Union.

But it has halved in the past two years after the Dutch Safety Board said the government was failing to protect citizens from earthquakes triggered by gas exploitation.

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Dutch groups demand tighter curbs on Groningen gas production

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screen-shot-2016-11-17-at-19-09-24A top Dutch court has received 25 appeals against the government’s decision to cap production at the Groningen gas field at an annual figure of 24 billion cubic metres from protesters who think it does not go far enough.

Several groups in the region had asked for a steeper reduction to prevent earthquakes, which have damaged thousands of structures in the northern province.

Output from Groningen, which once supplied 10 percent of demand in the European Union, has halved over the past two years after the Dutch Safety Board said the government was failing to protect citizens from earthquakes triggered by gas exploitation.

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Dutch government confirms cut in Groningen gas output

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Screen Shot 2016-09-01 at 08.40.08By REUTERSPUBLISHED: 23 September 2016

AMSTERDAM, Sept 23 (Reuters) – Gas extraction from the northern Groningen gas field will be held at 24 billion cubic metres per year for the coming five years, Dutch Prime Minister Mark Rutte said on Friday.

The decision made on Friday by Rutte’s government cemented a preliminary plan to cut output to minimise the risk of earthquakes resulting from production at Groningen, which once supplied 10 percent of the gas used in the European Union.

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Dutch parliament orders annual check on Groningen gas production

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Thu Sep 15, 2016 4:51pm BST

The Dutch parliament adopted a motion on Thursday ordering the government to evaluate every year whether gas production at the country’s Groningen field can be reduced further.

Output from Groningen, Europe’s largest gas field, has halved over the past two years after the country’s Safety Board said the government was failing to protect citizens from earthquakes triggered by gas exploitation.

In June, the government capped production at 24 billion cubic meters (bcm) annually for the coming five years but the motion adopted Thursday opens the door to further reductions.

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