Posts under ‘Peter Voser’

Daily Telegraph

Last updated: March 11th, 2010

An area near Fort McMurray, Alberta, Canada, where oil sands are believed to lie

The group of investors vociferously trying to persuade BP and Shell to re-evaluate their potential investments in the Canada tar sands has now enlisted a group of MPs in Britain to propose an early day motion questioning the project’s financial viability.

The move is part of a pretty well-coordinated campaign mobilised by FairPensions (members: ActionAid, WWF and a number of trade unions). This year, the rebels have managed to get enough shareholder support to submit motions to the oil companies’ annual meetings against the Alberta prospects, which environmentalists argue will be responsible for high levels of carbon dioxide emissions.

Shareholders obviously have a perfect right to kick up a fuss about investments they’re not keen on. Around 25pc of the FTSE-100’s dividends are paid out each year by BP and Shell, so the importance of these two companies’ decisions to UK pensions cannot be under-estimated.

However, it does seem slightly disingenuous that FairPensions is trying to claim that a big reason for their concern is the economics of the projects. They question the margins that will be made by the oil companies and warn of possible high legal fees from environmental challenges, plus the rising costs of climate change legislation.

But if they were so concerned about the right economic decisions being made by companies like BP, they would be having a look at its portfolio of renewables and “other” unit, which made a stonking $2.3bn loss in 2009. Yet there seems to be no issue with wind, solar and biofuels: all eco-friendly, low-carbon projects that are undertaken to improve the company’s green image and prepare for a future of heavier regulation of emissions/higher financial penalties, rather than turn an immediate profit.

What’s more, if you look at an investment like BP’s Project Sunrise, it represents a low proportion of the company’s overall capital expenditure. It is currently planning to spend $1.25bn on the venture over the next few years out of a total $20bn yearly budget on exploration and new projects. If given the go-ahead, BP’s oil sands will only be pumping out 60,000 barrels out of 4m barrels per day by 2014 – around 1.5pc of overall output.

I’m not taking sides on the environmental controversy of this debate. BP claims the extra carbon dioxide emissions of Project Sunrise – from well to wheel – will only be an additional 5-15pc. The campaigners put this figure at a much higher 12-40pc.

It’s just that all the talk about the oil sands’ profitability seems to obscure this real purpose of this argument – do the tar sands pose an unacceptable environmental risk and how much do we care about it? Obviously the economics of the project are borderline unless oil stays in the $80-100 per barrel range, confirmed by the fact that Shell’s Peter Voser has decided to slow the pace of investment at the moment to concentrate on conventional reserves.

But it is highly unlikely that BP and Shell would have been examining these prospects if there were not a probability that they could make some money and they will be subject to the same financial feasibility tests as every other investment – there would be little point in them wasting all this time and money just to spite the environmentalists. And I somehow doubt that the campaigners would be putting all this effort into an anti-tar sand campaign if the projects were the cleanest form of crude extraction in the world.

SOURCE ARTICLE

THE WALL STREET JOURNAL

MARCH 8, 2010

Peter Voser of Royal Dutch Shell talks about the kind of energy legislation he’d like to see

These days, giant oil companies find themselves trying to balance two big pressures on their business. Governments are trying to slash carbon emissions—but the world’s thirst for oil is growing by leaps and bounds. Peter Voser, chief executive officer of Royal Dutch Shell PLC, is navigating the situation by joining a business-backed effort to push for global-warming laws, and making sure Shell has a strong exposure to natural gas and alternative fuels.

Mr. Voser sat down with The Wall Street Journal’s Alan Murray and Kimberley Strassel to talk about the future of climate-change legislation, the company’s push beyond oil, the prospects for electric vehicles and more.

Here are edited excerpts of their discussion.

Chief Executive of Royal Dutch Shell, Peter Voser talks about what kind of a future oil based energy can have in an environmentally conscious world.

ALAN MURRAY: I’d like to start by asking you about U.S. CAP [the U.S. Climate Action Partnership], the business effort to push for global-warming legislation. You are the last oil company there. Many of the other majors never joined to begin with. BP joined and then pulled out because it didn’t like the direction that it was going in. Why is Shell alone among the oil companies in continuing to push for this?

PETER VOSER: We have a belief that we need a market-based energy legislation in this country. And by the way, in all the other countries as well. We feel that we can do more by being inside U.S. CAP together with the other stakeholders represented there in order to actually achieve the right outcome.

KIMBERLEY STRASSEL: What kind of bill could you want or expect that would actually be good for your industry?

MR. VOSER: What we want is energy legislation that drives supply security in this country, which drives the country to lower fuel emissions, which generates new jobs but also preserves old jobs.

To then go further down, we are a keen proponent of market-based energy legislation. We will quite clearly look out for natural-gas developments, which we see as a long-term source of energy that has a lot of positives.

And in general, I think our industry is facing an interesting challenge that the demand in the world will double, but we have to provide that energy at a much lower cost to the environment. This will drive technology developments, innovation developments, etc., and that’s normally where our industry has always been in a leading position. And that’s what we want to see in the legislation so that we have certainty on the carbon price, certainty on, let’s say, legislation that will stay for a while so that we can operate.

MS. STRASSEL: What odds do you give passage of a cap-and-trade bill this year?

MR. VOSER: I’m still hopeful that we get something passed. I know the timing will be longer than what we expected maybe 12 months ago, but we will do our part in order to make sure that we get something that the industry and the country can take forward. But I think we are in for a longer period before we get something.

New in the Pipeline

MR. MURRAY: We talk about Shell as an oil company, but you’re very close to becoming a predominantly natural-gas company, aren’t you?

MR. VOSER: That’s absolutely correct. Shell started quite a while back, actually, to put a lot of emphasis on gas. And by 2012, we will have more gas production world-wide than we have oil.

So this has been a journey of 20, 30 years that we have used our technology and innovation in order to drive the gas development on a world-wide basis because, let’s face it, it has 50%, 70% less CO2 than coal, for example, and that’s exactly where we see the long-term benefit.

MR. MURRAY: And in your view, is that the big answer to our environmental problems for the next 50-plus years?

MR. VOSER: I don’t think there is one answer.

On a global perspective, the energy demand will double—this is pretty much proved now—by 2050. So we will need most of the energy forms that we know today.

MR. MURRAY: What percentage of your capital spending goes to renewable energy sources, roughly?

MR. VOSER: It is not the capital intensity that drives renewable energies and alternative energies. It’s what you spend in technologies and in innovation. Roughly 25% of our budget at this stage goes into what we call alternative energies from an R&D point of view.

MR. MURRAY: And of the 25% of your R&D budget that you spend on renewables, what in that portfolio do you personally think is the most promising?

MR. VOSER: We are focusing a lot on biofuels at this stage. We just announced a few weeks ago a big joint venture in Brazil where we are bringing our first- and second-generation biofuels technologies together with Cosan, a sugar ethanol producer there, in order to speed up the second-generation capabilities because we need to speed up that process. So biofuels is one.

We are in wind. We have gone out of solar. We tried both silicon and thin-film solar, but we can’t see that as being something that we can scale up globally and get the economies of scale. So we leave that. It’s a technology that will be developed, no doubt, but we leave that to a smaller, medium-sized players.

Driving Ahead

MR. MURRAY: For your oil business, transportation is obviously a key to the future. How long do you think it will take for electric cars to become a significant part of the vehicle fleet?

MR. VOSER: We think between now and 2050 we will go from one billion cars to two billion cars world-wide. So it’s quite a growth there. We think by 2050 that roughly 40% of those two billion cars will be electric cars.

But there is a but to this. Which means in the meantime we will need all [types of environmentally friendly cars]. So we will need low-carbon-fuels cars, more-efficient engines. We will need the hybrids. There will be more electrical cars coming in. There will be fuel cells, there will be hydrogen. So I think there will be room and space to develop all of them.

Looking to the Market

MS. STRASSEL: You talked about how you wanted legislation here in the U.S. to help with the certainty. But as a global company you already operate in regions that do have climate restrictions. How has that affected your business?

MR. VOSER: I would like to have a market-based system that actually works on the global environment. Because the world, the trade flow today, is a global trade flow, so you cannot cut between frontiers, boundaries, countries, etc.

So while I think it is OK to start country or regionally, we need governments working together, and that’s where I think Copenhagen would have been a good way to achieve a global agreement. We didn’t get it. I’m not too disappointed because I think this is a journey. We will need more time.

The politicians or the governments also have to learn to bring some reality into the discussion from time to time. So we get biofuels legislation, for example, and two years later they change because they realize technically it’s not possible. I think that’s where governments, companies, NGOs can work together to set the right frames.

MS. STRASSEL: Some people say instead of all the negotiations and the offsets and the carbon trading, just put a carbon tax, in particular a gas tax, and see where that goes.

MR. VOSER: I would say you need a market-based system where you can actually give the right incentives for those industries that are affected to make sure that they can lower the CO2 over time and they can lower the costs to achieve that over time. You need an incentive there, and I just struggle to see that a tax is an incentive.

WSJ ARTICLE

THE WALL STREET JOURNAL

March 4, 2010, 12:55 PM ET

By Jim Carlton and Neal Lipschultz

Despite recent defections of two other oil majors, Royal Dutch Shell PLC has opted to stay in an influential lobbying group that has focused on shaping climate-change legislation, Chief Executive Officer Peter Voser said.

Mr. Voser, speaking Thursday at the Wall Street Journal’s ECO:nomics conference in Santa Barbara, Calif., was asked why Shell remained in the three-year-old U.S. Climate Action Partnership (USCAP) after two of its peers, BP PLC and ConocoPhillips, pulled out last month. The partnership is a broad business-environmental coalition that had been instrumental in building support in Washington for capping emissions of greenhouse gases, and the defections came amid growing debate over climate change.

“We feel we can actually do more being inside USCAP to achieve the right outcome,” Mr. Voser said.

But Mr. Voser agreed with a growing number of skeptics who don’t believe a climate change bill will be passed on Capital Hill this year. Asked how much money he would put betting on such an outcome, the CEO smiled wanly and said: “I think I can spend my money somewhere else.” Earlier at the conference, Michael Morris, chairman, president and CEO of utility giant American Electric Power, had pegged the chances of a climate bill’s passage in 2010 as “less than 50%.”

“The timing will be longer than we expected, but we will do our part” in influencing the bill, Mr. Voser said. He added Shell favors a market-based system of controlling carbon emissions, and that “I would like to have a marketplace that works on a global scale.” Mr. Voser said he believed eventually there would be carbon legislation in the U.S. and many other parts of the world, despite the failure of the Copenhagen climate talks to achieve a consensus.

“I think this is a journey,” Mr. Voser said. “We need more time.”

When asked about the theory of “peak” oil in the world and whether that theory was now dead, Mr. Voser said “I think what is dead is cheap oil.”

You need more technology, innovation and will find oil further away from markets, Mr. Voser said. More will be spent to get oil and consumers will pay, both for oil and gas.

Mr. Voser also said oil price volatility is here to stay. More money is flowing into commodities and there are more players in the market.

Shell, meanwhile, has been moving to become more of a natural gas supplier and continues to invest in alternative energies like biofuels, he said. With global energy demand expected to double by 2050, Mr. Voser said the world will need many sources of fuel, including oil. He predicted electricity would be needed to power 40% of  the world’s automobile fleet by 2050, when he predicted it would double to two billion vehicles from one billion.

WSJ ARTICLE

REUTERS

By Poornima Gupta

SANTA BARBARA, Calif., March 4 (Reuters) – Royal Dutch Shell Plc (RDSa.L) expects electricity-powered vehicles to account for as much as 40 percent of the worldwide car market by 2050, Chief Executive Peter Voser said on Thursday.

Voser, speaking at The Wall Street Journal’s ECO:nomics conference in Santa Barbara, said technological improvements and increases in the cost of producing gasoline will give a boost to vehicles that run on alternative power.

“We think between now and 2050, we will go from 1 billion cars to 2 billion cars worldwide,” he said. “We think by 2050, roughly 40 percent of those 2 billion cars will be electric.”

In the next 40 years, the market needs low-carbon fuels, more efficient engines and hybrid vehicles, Voser said.

“I think there will be room and space to develop all of them,” he added.

Gasoline demand in developed countries like the United States has started to decline, partly as vehicles running on alternative fuels have entered the market. Companies such as Shell and BP (BP.L) are spending more money on those newer technologies, including for next-generation biofuels.

Automakers such as Ford Motor Co (F.N) and Nissan Motor Co Ltd (7201.T) are racing to launch electric cars, betting these will be the environmentally friendly transportation of the future. Small players like Tesla Motors already sell electric vehicles.

Voser said Shell was investing 25 percent of its research and development budget into renewables, including wind power and biofuels.

Shell has bet big on ethanol by striking a deal with Brazil’s Cosan (CSAN3.SA) to create a $21 billion a year ethanol joint venture.

The 50-50 joint venture, with almost 4,500 filling stations nationwide, will better position Cosan and Shell to compete with the two top players in the market, state oil giant Petrobras (PETR4.SA) and Ipiranga, a unit of Brazil’s Grupo Ultra (UGPA4.SA).

(Reporting by Poornima Gupta. Editing by Robert MacMillan)

REUTERS ARTICLE

Eric Wesoff 03 04 10

“It’s fun to be an oil and gas CEO.”

Santa Barbara, CA — Peter Voser, CEO of Royal Dutch Shell, traveled a long way to speak at the Wall Street Journal ECO:nomics show this morning.  To give you an idea of the mindset of this particular audience, when polled on their expectations of future fuels, the winning response was nuclear, followed by natural gas.  Which is probably accurate but not the response you’d get from a bunch of enviros.

Shell expects global demand for energy to double by 2050.

Take note: Shell has transformed into a natural gas company.  Since 2004, the oil giant has invested more than $15 billion in natural gas in the United States.  By 2012, they will have more gas production than other fuels, in what he referred to as a twenty- to thirty-year journey.  This is a telling trend.  Wind and solar are nice, but natural gas is what is going to keep the world powered.

Voser reminded the crowd that natural gas produces 50 percent to 70 percent less CO2 than coal and that Shell has been somewhat surprised by the volume of natural gas deposits in the U.S.

In Voser’s words, “We need gas, conventional oil, and all other sources.”  He added that we need coal with carbon capture and sequestration and electromobility.

Shell knows about automobiles and the CEO quoted a few facts, the scariest of which was that his firm expects the number of automobiles to double to two billion by 2050.  He shocked the crowd with his forecast on electric vehicles — Voser said that 40 percent of automobiles will be electric by 2050.   But if EV electromobility is powered by coal, “then we are shooting ourselves in the foot.”

When it comes to renewables, Shell is focused on biofuels and trying to get second-generation biofuels to be economical as well as working on wind power.

Not solar, though.  They have gotten out of solar, both in silicon and CIGS thin film.  Shell can’t see solar as something that they can scale up.  They are “leaving it to smaller and medium size players.”

They are also doing work in tar sands — although he likes the term “oil sands” — which accounts for 2.5 percent of their production.  He thinks of it as a technology of last resort.  They’ve waited 40 years to go after this resource and expect that oil sands can have the footprint of traditional oil.

Voser said, “We need a CO2 price, not a tax,” although he is “skeptical” about energy legislation passing in the U.S. this year.  He added, “What we want is energy legislation which drives supply security and which generates new jobs but also preserves old jobs.”

Voser was in full agreement with T. Boone Pickens on focusing on the U.S.’ own reserves of natural gas “instead of buying oil from our enemies.”

SOURCE ARTICLE

FRANKFURT, March 1 (Reuters) – Royal Dutch Shell Plc (RDSa.L) Chief Executive Peter Voser defended the oil giant’s retreat from some green technologies to concentrate on oil and gas production in an interview with the German daily Frankfurter Allgemeine Zeitung.

Shell withdrew from its solar business because it was not prepared to make the required investments, Voser told the newspaper adding that alternative fuel for cars remained problematic.

Voser said Shell was investing between 20 percent and 25 percent of its research budget into biofuels, an area where the company still sees potential.

But Voser cautioned that second generation biofuels will take years before they become viable arriving on markets, “late this decade…if at all.”

Biofuels, hybrid technology and electric cars still faced difficult technological hurdles, and may even cause other problems, the Swiss chief executive said.

“In the next 40 years, the number of vehicles in the world will double,” he said.

Demand, he said, will come mainly from Asia, where many polluting coal fired power stations generate electricity, there could be a step backward from an environmental standpoint.

Voser said he does not expect massive growth for oil demand in the short-term. “Because 2010 is a difficult year for the world economy, particularly the second half, when stimulus measures come to an end,” he said.

“We will probably also continue at a slow pace in to 2011. But in the medium term, global demand for oil and gas will rise.”

(Reporting by Edward Taylor, Editing by Leslie Gevirtz)

© Thomson Reuters 2010 All rights reserved.

REUTERS ARTICLE

Tar sands are shaping up to be the thorn in BP (BP-) and Shell’s (RDSB) sides as concerns over potential expense prove almost as rife as worries over the environmental impact.

The company has agreed terms for a ten-year lease with Canary Wharf on 200,000 sq ft of Docklands offices

February 24, 2010

A view of the London Eye, located along the Thames River at County Hall, is seen across from the Shell Oil Centre building.

Carl Mortished, World Business Editor

Staff at Royal Dutch Shell will be moved next year from the Shell Centre at Waterloo to Canary Wharf as part of a huge redevelopment of the oil company’s historic London headquarters.

The company has agreed terms for a ten-year lease with Canary Wharf on 200,000 sq ft of Docklands offices at 40 Bank Street, a building close to the tower at One Canada Square.

About 2,000 employees are expected to make the move eastwards as Shell embarks on a huge property investment in Central London with the construction of new office buildings, a project that is expected to last a decade.

The search for alternative accommodation, conducted in secrecy by CB Richard Ellis, was given the code-name Project Thunderbird.

The decision to decant staff to Docklands marks the end of almost ten years of deliberation, false starts and setbacks by Shell as it tried to get a grip on its 50-year endowment of almost seven acres of valuable London real estate, including a 24-storey office tower on the Thames opposite the Palace of Westminster.

A spokeswoman for Shell confirmed yesterday that it was negotiating a deal on 200,000 sq ft at Bank Street. She said that the decade-long move by staff to Canary Wharf was “temporary” while the company redeveloped the low-rise buildings adjacent to the tower.

“Shell has no permanent plans to leave the tower building on the South Bank and will remain a major employer in the area with established connections to the local community,” the spokeswoman said.

Shell’s move to Docklands coincides with another round of cost-cutting by Peter Voser, the new chief executive. He has made his mark as a relentless pruner and trimmer of overheads since taking over from Jeroen van der Veer last year.

The recession took its toll on Shell’s profits in the fourth quarter of 2009 and Mr Voser’s response was to announce a drive for a further $1 billion (£650 million) in savings.

Periodic bouts of internal costcutting and the removal of layers of imperial bureaucracy led to the gradual attrition of Shell’s head office staff during the 1990s.

Shell Centre, next to the then neglected South Bank arts complex, became a windswept wasteland, the public spaces populated by skateboarders and the homeless. The staff bloodletting opened up opportunities for the company to exploit its huge land bank in the centre of London.

It first sold off the White House, one of the downstream low-rise buildings, to residential property developers. Then it drew up plans to convert the ground floor and subterranean levels of the Shell Centre Tower into a leisure and retail complex. The oil company joined forces with Lend Lease, the Australian developer, to bring the project, a 600,000 sq ft design by Arup, to fruition.

However, Shell’s real estate dreams fell foul of local politics in a London borough that had earned a reputation as a property developer’s graveyard.

Lambeth Council scuppered the project, complaining that it was too big and that Shell’s vast retail ambitions would have a negative effect on Lower Marsh Street, a small shopping alley behind Waterloo station.

Shell has yet to choose a new partner for its revived real estate dream and some in the property industry speculate that it might be tempted to sell the site if values recover strongly during the decade-long hiatus of development.

Shell Centre opened in 1963 after six years of construction and contained all the accoutrements of a more paternalistic era.

To accommodate the needs of 5,000 staff, the floors beneath the tower contained a travel agency, a bank, a hairdresser, restaurants and bars, a giant sports hall and gymnasium, a cinema and a near-Olympic size swimming pool.

• Shell investigates posting of personal data

• Shell HQ might be redeveloped

• Shell to cut 1,000 jobs and close six refineries

TIMES SOURCE ARTICLE

“One of the principles underlying all of our work on the Web has been that we should be true to the spirit of New Shell. This means that we are seen to be open, listening, interested in the views of others…”: SHELL CENSOR – MARCH 1999

Shell Internet Censorship

By John Donovan

Printed below is a Shell internal email sent in March 1999. Shell was obliged to supply it to us in accordance with an application we made under the UK Data Protection Act. The “X’s” denote sections redacted (censored) by Shell, which includes the name of its author and apparently an extensive circulation list – 4 lines deep.

Although not mentioned in the still visible text, the author of the email was talking about the former “Tell Shell” Internet discussion forum once available on shell.com, until it was censored into oblivion.

Knowing of the involvement of Shell International General Counsel Richard Wiseman in the overt and covert censorship carried out on “Tell Shell” postings, we asked him if he was the author of the email. This was his reply yesterday, 22 February 2010:

Dear Mr Donovan,

I have no record or recollection of drafting or being involved in the drafting of the email you refer to.  Since you claim it was written more than 10 years ago, this is not surprising.  The style is not mine however and I do not believe that I am likely to have been the author.

As usual, I do not propose to comment otherwise on your draft and this should not be taken as acceptance of any of the assertions you make.

Regards
Richard Wiseman

Chief Ethics and Compliance Officer
Royal Dutch Shell plc
Shell Centre, London SE1 7NA

We accept what Mr Wiseman says. Of course, since Shell carried out the blanking out process on the email, it could reveal all of the censored information, but has not offered to do so, even though Royal Dutch Shell CEO Peter Voser and  Company Secretary Michiel Brandjes are fully aware of this article.

It is clear from the content that the author of the email was someone in control over the content of “Tell Shell”.

He or she claimed:

“One of the principles underlying all of our work on the Web has been that we should be true to the spirit of New Shell. This means that we are seen to be open, listening, interested in the views of others…”

Astonishingly, the author then goes on to try to provide a rationale behind the decision to remove 9 out of ten postings we made on “Tell Shell” and to say that if accused of censorship, Shell would argue that it had simply been trying to prevent us dominating discussions. The postings were also manipulated to make it less likely that forum users would visit our own website and be exposed to the full list of our allegations i.e. the truth.

Despite the claims of an open, censorship free discussion forum for lively debate, Shell did not want to entertain controversial postings. Hence the introduction of censorship on “Tell Shell”, providing an explanation on the forum whenever an unwelcome contribution was deleted.

Shell subsequently resorted to secret censorship, whereby postings vanished without trace or explanation. This underhand policy, involving Richard Wiseman, brought about what we described as: “The slow death of the Tell Shell Internet discussion forum”.  After the secret censorship was exposed, Shell “suspended” the forum, as it turned out, permanently.

Not content with censoring “Tell Shell”, Mr Wiseman also wanted us to censor our website. The following is from an email he sent to us on 11 November 2005:-

The extraordinary tolerance shown to your internet activities ought to demonstrate better than anything else the fact that we are uninterested in, and unmoved by, your current activities.  It is true that when your comments to “Tell Shell” overstep the bounds of honest comment and become vituperative or defamatory, we remove them.  In this context, I suggest that the image on

http://www.royaldutchshellplc.com/week44/vantheman3putinnovember2005.htm.

be removed as a matter of urgency.

Some extracts from our response to Mr Wiseman…

The implied threat in your email regarding the satirical comments directed at President Putin, betrays Shell’s real attitude to freedom of speech on the Internet.

Thank you for the official confirmation regarding Shell’s censorship of the “Tell Shell Forum”. Such suppression of free speech is directly at odds with statements made by Shell on the forum inviting feedback and lively open debate in “uncensored space”. Since we have never posted any bad language on Tell Shell, the censorship relates entirely to our criticism of Shell and our accurate account of past events, supported by documents in our possession.

Having admitted to Shell’s censorship policy on the Tell Shell Forum, your next comments imply that Shell has rights or influence over what is published on RoyalDutchShellplc.com. I would respectfully point out that although you can censor postings on your website, you cannot censor commentary posted on ours. You have not mentioned the censorship of postings by other contributors to Tell Shell offering constructive criticism, including former Shell employees (with one such posting deleted in an underhand manner). As far as I am aware, none of the postings critical of Shell contained any bad language.

EXTRACTS END

If you also read the information on the linked articles, it is clear that Richard Wiseman has been a driving force behind the machinations (trickery and censorship) over unwelcome critical postings on “Tell Shell”, which led to its demise and replacement by an unauthorized “Shell Blog”. I refer to the facility at royaldutchshellplc.com on which visitors can make positive or negative postings about Shell (or the Donovan’s), without being subjected to censorship.

In other words, people posting comments can rest assured that some self-serving lawyer is not controlling what is deemed sufficiently favorable to Shell to remain on display. Under the circumstances, perhaps Wiseman’s already lengthy job title should be expanded still further: Chief Censor, Ethics & Compliance Officer, Royal Dutch Shell Plc.

MAIN ARTICLE ENDS

RELATED INFORMATION

A posting made on our Shell Blog by former Shell executive Paddy Briggs was noted with disdain by a Shell employee in an internal email sent on 25 June 2007, who stated:

FYI, Paddy Briggs latest contribution – I think he should choose his friends more carefully…

In the absence of “Tell Shell” I think that this is possibly the best forum for those of us who care about Shell and have informed opinions about the company to share with others. The Donovans perfume (subsequently corrected!) a very useful function and, whilst I don’t always agree with them, I do admire them and certainly do not question their motives or their integrity.

(Since we know the above posting was made by Paddy Briggs, we have inserted his name where it was previously redacted. BTW, we have never met or even spoken to Paddy Briggs, who is now a Trustee of the Shell Contributory Pension Fund.)

A Shell internal email sent earlier the same day contained a more enlightened view about postings on our website. Its author said: “I support Mr Donovan’s right to free speech – even if it is anti-Shell.”

THE SHELL INTERNAL EMAIL SENT IN MARCH 1999

From:XXXXXXXXXXXXXXXXX

Sent: 23 March 1999 10:54

TO: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
(E-mail)
Subject: FW: DONVAN

XXXXXXXXXXXXXXXXXXXXXXXXXXXXX

One of the principles underlying all of our work on the Web has been that we should be true to the spirit of New Shell. This means that we are seen to be open, listening, interested in the views of others and providing information which helps people to make their own minds up, not just thrust our opinions at them.

This is why, for several years, we have included links to the websites of organisations critical of Shell and have only removed contributions to the Website discussion fora if they were either:

a) abusive of individuals, or:

b) contained libellous material, where we didn’t wish to become involved in the legal implications of being a publisher:

Beyond that, we have deliberately not censored contributions, because this would simply have handed ammunition to our critics.

Before we launched the new campaign, we agreed that we should apply the same guidelines to the new campaign-related discussion fora. It was recognised that they might become targets for our critics, but if we claim to be interested in dialogue, then we need to be seen to be engaged in it and our arguments need to be seen to stand up for themselves.

In respect of Don Marketing, the monitoring of the fora quickly picked up that he had posted ten contributions and we decided to reduce it to one. If we were challenged, our argument would be that we had not censored, but had simply stopped him dominating discussions to the irritation of other users.

His one remaining contribution will be located in the Human Rights section at
http://www shell com/campaign/jssue/stage/1.1850.2.00.html

At the moment, this particular contribution of his is simply a link to his Shell Shareholders site. However, I have asked XXXXX to include Donovan’s text from one of his other postings so that people can see the essence of his case without having to go and enter his website and get the full list of his allegations. This will be done later this morning.

Regards

xxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxx

Shell International Limited, Shell Centre
London SE1 7NA, United Kingdom
Tel: xxxxxxxxxxxxxxxxxxxx
Email: xxxxxxxxxx

When the recession hit, the major companies streamlined, cut costs and became more efficient, giving them a shot at a profit comeback

By BRETT CLANTON
HOUSTON CHRONICLE

Feb. 21, 2010, 4:32PM

Big Oil has had a little less swagger in its step of late, humbled by a global recession that halted a multi-year run of soaring profits and exposed weaknesses that had been less acute when times were good.

International giants like Exxon Mobil and BP have suffered the effects of the economic downturn, which brought the first significant decrease in global energy demand in nearly three decades, created wild gyrations in oil and natural gas prices and wreaked particular havoc on the oil refining business.

But they responded in different ways. Some took a hard look at organizational structures and cut thousands of jobs. Others pared portfolios to pay debts and refocus on core businesses, while at least one took advantage of the depressed climate to boost spending and make a major acquisition, even as profits tumbled.

“The majors weathered the storm in 2009, but I would also say it made them more efficient, more focused,” said Gary Adams, vice chairman of Deloitte’s oil and gas practice in Houston.

The biggest international oil companies will likely continue to face tough conditions in oil refining this year, amid still-weak demand for gasoline and other fuels, rising crude prices and surplus plant capacity.

The natural gas business also remains challenging in the short term, as does the task of trying to lure back investors who recently have been more enamored of shares in smaller, faster-growing oil and gas firms.

Add broader concerns about the slow pace of economic recovery, the increasing difficulty in accessing new oil and gas resources and the possibility of new, costly regulations on the industry, and the outlook grows cloudier still.

Majors have advantage

Yet, the oil majors — with their diverse integrated business models, big balance sheets and cautious approach to investing — still may be among the best equipped in the industry to ride out what’s ahead.

“That’s partly why they’ve gotten to be as big as they are,” said Ken Medlock, a fellow in energy studies at Rice University’s Baker Institute.

Or, as Kenneth Cohen, Exxon Mobil’s vice president for public and government affairs, put it recently, “It’s really these times that our company and our business model are designed to handle.”

In recent years, rising oil and gas prices drove profits of the five biggest Western oil companies — Exxon Mobil, Royal Dutch Shell, BP, Chevron Corp. and ConocoPhillips — to new heights.

In 2008, when crude oil reached nearly $150 a barrel and retail gasoline topped $4 a gallon nationwide, the companies made a combined profit of $100 billion. That’s the second-highest on record from the group, exceeded only by the 2007 combined total of $123 billion. But the global economic crisis changed all that and in 2009 slashed the group’s combined haul to $61 billion.

In response, the majors have taken steps to cut costs and streamline operations.

• • Shell, under a sweeping reorganization launched in July by new CEO Peter Voser, cut 5,000 jobs last year, including hundreds in Houston, and aims to eliminate an additional 1,000 positions this year. It’s also reviewing 15 percent of its non-U.S. refining capacity for possible sale.

• • BP has shed 7,500 employees since late December 2007 under an ongoing turnaround program led by CEO Tony Hayward, who said this month the British oil giant still has a way to go in becoming more competitive.

• • ConocoPhillips, Houston’s largest public company, plans to sell $10 billion in assets over the next two years to help pay debts and improve financial flexibility. Separately, the company recently said it may consider closing refineries that can’t cover their costs.

• • Exxon Mobil, the biggest U.S. oil company, has shed global refining assets in recent years, and officials said it will continue to “optimize” its downstream portfolio, but it doesn’t see any need for a major restructuring.

• • Chevron Corp., after cutting expenses 15 percent in 2009, is planning a reorganization of its global refining business, which will result in an unspecified number of job losses. It has also cut its 2010 capital spending budget by 5 percent.

‘Becoming leaner’

Many of the moves were tied directly to the global collapse in refining, but the poor economic environment also gave some companies cover to take an ax to organizations that had grown too big or complex.

“A lot of this is eliminating redundancy, becoming leaner, and that’s important, particularly in an environment where costs are as high as they are,” Medlock said.

Recently, however, stabilizing global economic conditions and higher oil prices have helped stoke investment and are buoying hope of a recovery.

Spending on exploration and production, excluding acquisitions, is expected to rise by 7 percent to $326 billion in 2010 among more than 65 of the largest publicly traded oil and gas companies, according to a recent report by Norwalk, Conn.-based energy research firm IHS Herold. That compares with a 23 percent decline in upstream spending in 2009.

Also this year, majors likely will be on the hunt for acquisitions, particularly those that expand their holdings in North American natural gas shale plays, like Exxon Mobil’s recent deal to purchase Fort Worth’s XTO Energy for $41 billion.

“Unconventional gas is still where a lot of the action is going to be,” said Daniel Yergin, chairman of IHS Cambridge Energy Research Associates in Cambridge, Mass.

Not only are such deals a strategic bet the world will move toward cleaner fuels, they could help majors regain the attention of investors who have recently rewarded independent oil and gas producers for leading the way in shale and other unconventional gas plays.

In 2009, Standard & Poor’s Oil and Gas Exploration index — a basket of stocks that includes names such as Anadarko Petroleum, Apache Corp. Devon Energy and Southwestern Energy — grew 41 percent. By contrast, a Standard & Poor’s index that tracks the majors fell 4 percent.

But there is another possible explanation for the majors’ renewed interest in North American gas plays. With access increasingly limited to new oil and gas reserves around the globe, they’re simply running out of places to invest.

“All of the sudden, North America looks very attractive relative to other opportunities out there,” said Fadel Gheit, industry analyst with Oppenheimer & Co. in New York.

“It’s the devil you know versus the devil you don’t know,” Gheit said, “and they know this devil pretty well.”

brett.clanton@chron.com

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