Ian Lyall, Daily Mail
16 March 2010, 9:52pm

He said he was ‘energised’ and up for the fight. But as he stood at the podium to deliver the company’s annual strategy review, Shell boss Peter Voser (right) looked anything but.

His audience of a hundred or so British and foreign journalists listened with an air of resignation rather than in rapt attention.

Voser isn’t a natural orator. His clipped Swiss accent and the dry delivery may work well around the boardroom table, but his style is hardly inspirational.

Which is a pity. Because his message was an uplifting one for Shell investors, and addressed the concerns of the critics who dismiss the Anglo-Dutch giant as low growth, bureaucratic and bloated.

Voser’s trick was to come up with a fairly punchy production target and spice it with a subtle change of direction and emphasis.

And it seemed to work, with the company’s London-listed A shares rising 27.5p to close the day at 2920p.

The briefing re- capped the impact Voser has made in his short tenure. Since becoming chief executive in the summer of last year, he has spearheaded an impressive $2bn cost cutting drive that has seen the loss off 5,000 jobs, mostly mid-ranking managerial posts.

An extension to that programme was unveiled yesterday. It will save another $1bn by cutting a further 1,000 roles, though the workforce still numbers more than 100,000.

But what grabbed the analysts’ attention was his plans to have Shell pumping around 3.5m barrels of oil a day by 2012.

This implies an annual growth rate of 3.5%, which is well ahead of the rather pedestrian performance of rival BP at around 1.5%.

Shell even seems to have raised its game in finding new oil and gas fields, with its reserve replacement rate running at a healthy 288%.

Voser showed he recognised the lingering misgivings of investors, though he was careful to couch the message in diplomatic terms that wouldn’t offend his colleagues and predecessor.

‘When I became chief executive in the middle of last year, I did think the organisation of the company was working against us,’ he told the meeting at a central London hotel.

‘Shell had become too complicated, and slower than I’d like, and working on too many areas and options.’

The simplification of Shell, which has many moving parts, is borne out of necessity.

With the oil price hovering at, or close to, $80 a barrel, more investment is going into exploration and production.

For recession-hit refining, in the middle of the worst slump in 20 years, the pendulum has swung the other way. Capacity is set to be cut by around 15%, with plants sold or even shut down.

And the marketing operation, which owns the company’s filling stations and also sells motor oil and jet fuel, is also undergoing a shake-up. It is focusing on fewer markets to improve profitability.

Only one of the laggards seems to have been spared the Voser treatment: Shell’s gas business.

It has been hit by the downturn but is deemed to be a fundamentally sound business.

Voser trumpeted a series of exploration success stories that tell a tale of a growing conservatism, so we heard about the company’s strikes in the Gulf of Mexico, Australia and North America.

Relatively expensive regions in which to work, they do have the upside of being politically stable and incredibly easy places to do business.

Air-brushed from the literature were the likes of Nigeria and Russia.

It was only when prodded that Voser commented on the war-torn African nation, where the oil reserves are plentiful, but the region is a mess of infighting and instability: ‘In the past, as I have said many times, Shell has depended a lot on the growth of Nigeria. In today’s situation, we still have the same growth potential in Nigeria. But we have seeded plenty of projects in other parts of the world where we also can achieve growth.’

Hardly a ringing endorsement of the country’s prospects.

Some analysts, such as Collins Stewart’s Gordon Grey, see Voser’s latest strategy pronouncement as ‘an important turning point operationally’ for Shell.

The respected and experienced Richard Griffith of Evolution has been following the company for far too long to be totally convinced: ‘It’s a positive statement, but there is still plenty to be delivered.’

Bloomberg.com

Watch

Shell’s Voser Interview

March 17 (Bloomberg) — Peter Voser, chief executive officer of Royal Dutch Shell Plc, talks with Bloomberg’s Andrea Catherwood about efforts to control spending as industry costs rise. Voser also discusses the company’s growth strategy and investments in refineries and biofuel projects. They spoke yesterday in London.

Voser Says Shell Must Control Spending as Industry Costs Rise

By Will Kennedy and Andrea Catherwood

March 17 (Bloomberg) — Royal Dutch Shell Plc Chief Executive Officer Peter Voser said industry costs have started to rise and the company will use technology to control spending as it invests $100 billion to boost production.

“Costs have not come down as much as we hoped for, and some of them are now rising again,” Voser said in an interview with Bloomberg Television broadcast today. Shell’s challenge is to be “more speedy in terms of technology implementation.”

Shell, vying with BP Plc as Europe’s biggest oil company, said yesterday it’s assessing more than 35 projects to keep production rising until 2020. Australia, where the company is developing offshore and coal-seam gas reserves, may attract as much as 40 percent of Shell’s capital expenditure. It has higher wage rates than other countries where the company operates.

“In Australia, we are doing floating LNG, which is actually fabricated in Korea, so we will be less exposed to the labor costs,” Voser said in London. We need to do “things differently in the future so that you actually save costs and get things built cheaper.”

Crude prices doubled to more than $80 a barrel in the past year, prompting producers to resume projects put on hold during the recession. Oil and gas industry spending will rise 11 percent this year to $439 billion, according to Barclays Capital. Increased investment may start to reverse reductions in drilling and engineering costs caused by the global slowdown.

Raise Production

Voser, speaking to analysts at the company’s annual strategy briefing, outlined plans to raise oil and gas production 11 percent by 2012 to 3.5 million barrels a day. The company’s capital expenditure, set at $28 billion this year, will be between $25 billion and $27 billion from 2011 to 2014.

Investment in production will be focused on three main areas, Voser said in the interview. These are Australia, the Gulf of Mexico and so-called tight gas in the U.S., where recently developed drilling techniques are used to access resources trapped between rocks.

“On top of that we have other projects in areas like Kazakhstan, like Nigeria, in the Middle East we have Iraq,” he said. “We have got a vast set of opportunities. I’m very pleased with the variety we have in the portfolio, so if one doesn’t come, we’ve got others to replace those.”

Shell yesterday announced plans to cut staff by a further 1,000 people, making the overall reduction of 7,000 in the three years through 2011. Voser has said he will cut costs by $1 billion this year, after reducing them by $2 billion last year.

The company plans to sell filling stations and oil refineries to free up capital for production spending. Shell is negotiating with India’s Essar Oil Ltd. to sell three European plants after the recession cut fuel-processing profits.

“You need bigger refineries, more complex refineries, because they can withstand recessions better than smaller refineries,” Voser said.

To contact the reporters on this story: Will Kennedy in London at wkennedy3@bloomberg.net; Andrea Catherwood in London at acatherwood@bloomberg.net.

Last Updated: March 17, 2010 05:09 EDT

BLOOMBERG ARTICLE

• Shell to quit 9,000 petrol stations worldwide

SOURCE ARTICLE

March 16, 2010

David Wighton: Business Editor’s commentary

He arrived with a bang and within weeks had axed 5,000 jobs. But eight months after taking over the helm at Royal Dutch Shell, is Peter Voser making progress turning around the supertanker?

Long derided as the most sluggish of the top oil companies, Shell will today try to persuade investors at its annual strategy briefing that it is back on course. There certainly are some encouraging signs. For six years, oil production has been drifting lower at an average of 3.5 per cent a year. But with a series of big projects due to give the figures a boost this year, production is expected to stabilise at about 3.2 million barrels a day in 2010. In 2011 it could start growing for the first time in almost a decade.

Mr Voser can claim only limited credit for this trend, which reflects years of investment. But his own changes are starting to have an impact, in particular a sweeping reordering of the company that has reduced costs and improved focus.

For years, Shell was plagued by delays and budget overruns on big projects. So far, his creation of a separate division, Projects and Technology, responsible for masterminding large-scale operations, seems to be working well. Compared with peers such as Exxon and BP, Shell has been slow to make such changes, but that means the potential for improvements is greater.

Mr Voser has promised at least another $1 billion in cost cuts this year and will provide further details today.

He is still grappling with huge challenges — not least Shell’s sprawling refining and marketing operation, which is struggling in the face of the industry’s most severe downturn in 20 years. The group’s poor record at finding new supplies of oil and gas also remains a profound problem which Voser must address.

Still, his decision to sell some of Shell’s onshore Nigerian assets and bid for Arrow Energy, an Australian producer of coal-seam gas, show that he is willing to give the portfolio a good shaking. It will be years before Mr Voser’s performance can be judged properly — but so far so good.

david.wighton@thetimes.co.uk

TIMES ARTICLE

DOW JONES NEWSWIRES

LONDON -(Dow Jones)- Nigerian militant group the Movement for the Emancipation of the Niger Delta, or MEND, launched a bomb attack on the Delta State government house in the city of Warri Monday.

Agence France-Presse reported at 1024 GMT that a blast had rocked a ceremony held to mark an amnesty for former rebel fighters in the city. It wasn’t clear if there were any casualties.

MEND e-mailed a warning of the attack at 1013 GMT, saying the first of three explosive devices planted in the government compound would be detonated at 1030 GMT. The group also threatened further attacks against oil infrastructure in the region, singling out facilities operated by France’s Total SA (TOT) as targets.

“Operatives of MEND today March 15, 2010, successfully breached the security at the Delta state government house in Warri and planted three explosive devices in and around this compound,” the MEND statement said. It warned the government house and the neighboring school should be evacuated before the first detonation, but didn’t say when the other devices would explode.

The bomb targeted a conference organized by Nigeria’s Vanguard newspaper, which was being hosted in the government compound, the e-mail said.

By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com (END) Dow Jones Newswires

March 15, 2010 07:02 ET (11:02 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc.

SOURCE ARTICLE

Shell’s oil facilities in the Niger Delta have suffered from a number of criminal and militant attacks, leading Peter Voser, chief executive officer, to declare that the country is no longer a key area for growth.

LAGOS — Shell said Thursday it had closed down two gas plants feeding Nigeria’s power stations so that it could carry out repairs on a damaged supply pipeline in the restive oil-producing region.

The Australian

Matt Chambers
Thursday March 11, 2010 12:00AM

ROYAL Dutch Shell will this month fly its new head of Australian production and exploration, Ann Pickard, into the centre of its $3.3 billion joint bid for Arrow Energy.

The appointment of Ms Pickard — head of Shell’s operations in the restive Nigerian delta oilfields and the rest of Africa for the past five years — is seen as a sign of Australia’s growing importance to Shell, which is planning big liquefied natural gas projects on the east and west coasts.

Shell has interests in the Gorgon, Browse, Prelude and Sunrise projects on the west coast and the Curtis Island LNG plant on the east coast. Ms Pickard is due to start in Australia at the end of the month.

Shell would not say whether its partnership with PetroChina to jointly acquire Arrow had influenced Ms Pickard’s start date.

There was no word from Arrow or Shell yesterday on the cash bid. Arrow is still deciding whether to dump its proposed purchase of LNG Ltd’s Fisherman’s Landing LNG project in Gladstone in favour of Shell and PetroChina’s $4.45 a share offer for its Australian assets. Arrow shares rose 1c to $5.03 yesterday.

The premium to the offer reflects the 50c to 75c at which analysts value Arrow’s international coal seam gas ground.

Ms Pickard’s previous posting in Lagos, Nigeria, has been described as the most dangerous executive job in global oil.

Last year, she was named the world’s 25th most powerful businesswoman by Forbes.

Ms Pickard will be a headline speaker at this year’s Australian Petroleum Production and Exploration Association conference in Brisbane in May.

SOURCE ARTICLE

Posted: 04 March 2010

Associated Press, 03.03.10, 07:47 AM EST

LAGOS, Nigeria — Royal Dutch Shell PLC says unknown gunmen have attacked an oil flow station in the restive Niger Delta.

Tony Okonedo, a spokesman for the company said Wednesday that explosives planted at the Kokori flow station in the western half of the Delta detonated, damaging the unused station. Okonedo said no employees were in the area at the time of the detonation on Tuesday.

A previously unknown group later issued a statement to Nigerian newspapers claiming responsibility for the attack.

Militants in the Niger Delta have attacked pipelines, kidnapped petroleum company employees and fought government troops since January 2006. They demand that the federal government send more oil-industry funds to Nigeria’s southern region, which remains poor despite five decades of oil production.

Copyright 2009 Associated Press. All rights reserved.

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