I doubt that Mr. Voser will emulate Network Rail bosses in the face of a widespread public backlash against Fat Cat bonuses and waive his Fat Cat bonus, as they have, to improve safety? Fat chance.

By John Donovan

According to a report filed on Monday with the U.S. Securities & Exchange Commission, Peter Voser, the Swiss Chief Executive of Royal Dutch Shell Plc received €6.75 million in salary for 2011 plus a bonus of €3.5 million, a combined total of over €10 million.

Voser wants half of his bonus (€1.75 million) paid in shares. The full details of the bonuses at the top of Shell will not be known until publication of the annual report of the company.

Peter Voser was in 2010 the highest paid director of any Dutch listed company.

This is the gentleman who as part of his Vosification plan, asked hundreds of senior Shell managers to reapply for their own jobs.

I doubt that Mr. Voser will emulate Network Rail bosses in the face of a widespread public backlash against Fat Cat bonuses and waive his Fat Cat bonus, as they have, to improve safety? Fat chance.

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Introduction by John Donovan

It seems timely, in view of recent postings on our Shell Blog, to republish an article about Shell CEO Peter Voser authored by retired Royal Dutch Shell Executive, Paddy Briggs (right). It was first published on 27 July 2009. Paddy is currently a Member Nominated Trustee of the Shell Contributory Pension Fund.

On a Swiss roll…

By Paddy Briggs

Here’s the story. You are a Swiss accountant with a proven record of ruthlessness and synthetic business acumen. You are comfortable with numbers – that’s what you do – but you know little about the minutiae of the oil business. How can you be – you are not an “oil man” you are a “dollars man”. By guile, good fortune and the Peter Principle you find yourself at the helm of one of the world’s biggest oil and gas companies. You know that you will struggle with the difficult things – like creating an organisation that finds, develops, transports, refines and markets hydrocarbons. You know nothing at all about the oil and gas chain from exploration to consumption. You’ve never really worked in it – other than seeing spreadsheets which show you how much it costs. But you are now in charge. So what you do is retreat to the familiar world of numbers. That world where there is certainty – where something that costs “$100m” is only supportable if an adequate ROACE is assured. And where, even though future earnings are always, by definition, unpredictable you find a way of getting bogus certainty where there is none. By appointing more accountants and listening to them.

And then there is the term over which you plan to steer the business. Everyone knows that the genetics of the oil business are very long term. To find oil (which costs money) and to develop that oil (which costs more) is within the special competences of Shell – always has been. But to harvest the oil and the gas and to generate the income streams you have to be patient. But how can you be patient if you want to show how macho and “profit-focused” you are? Cut, cut, cut. It’s what I do. And immediately the bottom line benefits. Never mind that in five or ten years we won’t have any new discoveries. Never mind that in a decade or so the reserves cupboard will be bare. I’ll be on a seven figure pension by then like Mark and Phil and Jeroen before me. Ha!

Shell warned the government not to tax it out of the UK, as it sketched out ambitious growth plans alongside an underwhelming set of results.

Chief executive Peter Voser said the Anglo-Dutch oil company was aiming to pump 4bn barrels of oil per day (bpd) by 2017, compared to 3.2bn today.

Net spending will rise from £15bn to £19bn this year as it chases its goal, although most of the difference will come from fewer asset sales, with actual investment set to rise by a more modest £1bn to £21bn.

Fourth-quarter profits fell 4pc to £4.1bn, taking the gloss off a 54pc rise in annual income to £20bn, thanks to high oil prices. The markets were less than impressed, either by Shell’s growth plans or its recent performance, sending the stock down 3.5p to 2265p.

Voser issued a coded warning to George Osborne not to tax Shell out of investing in Britain, after the Chancellor unveiled a £10bn, five year North Sea tax grab last year. ‘We hope we’ll get enough investment incentives in terms of tax structures so that we can actually keep the oil and gas industry alive here,’ he said.

He also predicted more closures of European refining operations after Swiss firm Petroplus collapsed, threatening UK supplies from the Coryton refinery in Essex. ‘I think we’ll see just a few big refineries surviving in the long term.’

But Europe currently has 6m bpd of surplus capacity, he added. Shell’s own downstream operation – effectively refining and marketing – slumped to quarterly losses of £176m, compared to a £305m profit last year.

Shell has been retrenching from both the UK and downstream of late, selling its Stanlow refinery to India’s Essar.

Chief financial officer Simon Henry said 80pc of future investment would focus on upstream – exploration and production – with 60pc of that sum to be spent in Australia and North America.

Much of that will come from environmentally controversial ‘shale gas’, with £3.8bn earmarked for exploration.

The company will also spend 35pc more on exploring for oil and gas, as well as investing in new sources of liquefied natural gas and chemicals.

Dividends are expected to rise marginally from the first quarter of 2012, up 1 cent to $0.43.

SOURCE ARTICLE

Oil prices could fall to $70 a barrel during 2012, from current levels above $110, as high volatility in the economy and energy markets becomes “a fact of life”, Royal Dutch Shell executives said.

By Emily Gosden: 3 February 2012

SOURCE ARTICLE (WITH COMMENTS)

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There are two main differences between Royal Dutch Shell and BP.

By Damian Reece, Head of Business 11:17PM GMT 02 Feb 2012

February 02, 2012, 11:40 AM EST

By Bloomberg News

Feb. 3 (Bloomberg) — PetroChina Co., the country’s biggest energy producer, boosted ties with Royal Dutch Shell Plc after agreeing to buy a 20 percent stake in its Groundbirch shale-gas project in Canada.

Shell will remain the operator of the project, Mao Zefeng, the Beijing-based senior assistant secretary to PetroChina’s board, said by telephone yesterday. He declined to give the value of the transaction.

PetroChina plans to pay more than $1 billion for a stake in the Groundbirch property, Hong Kong-based FinanceAsia reported on its website, without saying where it got the information. Shell and PetroChina’s parent agreed in June 2011 to increase cooperation in energy exploration in China, estimated to hold the world’s largest reserves of shale gas.

“Although PetroChina will gain just a minority stake, the firm can re-deploy any advanced technologies acquired overseas back home to better exploit China’s vast shale-gas reserves,” Gordon Kwan, head of energy research at Mirae Asset Securities Ltd. in Hong Kong, said by e-mail.

The deal with Europe’s biggest oil company is an extension of the companies’ cooperation in China, Mao said. Shell and China National Petroleum Corp., PetroChina’s parent, completed the country’s first horizontal shale-gas well in March.

LNG Exports

“The shale-gas project will continue to supply Shell’s customers in North America,” Mao said. “In the long term, we will explore the possibility of exporting it to Asia in the form of liquefied natural gas.”

PetroChina won’t release detailed “numbers” on the deal with Shell as the size of the transaction isn’t big, he said.

“I can confirm that CNPC will join us in Canada,” Shell’s Chief Executive Officer Peter Voser said in London yesterday. “It’s part of our global partnership to optimize our business working environment inside and outside China.” He declined to give the value of the deal.

The unit of CNPC has gained 4.1 percent in Hong Kong trading in the past year, compared with the 13 percent slump in the benchmark Hang Seng Index. The stock rose 1.9 percent to close at HK$11.62.

PetroChina expects to surpass its target of producing 1 billion cubic meters of shale gas in 2015, Mao said in an interview in Beijing. Commercial output of “a few hundred million” cubic meters is possible by 2013, according to Mao.

“We’re making good progress in drilling,” he said. “The question is now not whether China has shale gas, but how we can streamline the production process and deliver the scale.”

Chinese Shale Gas

PetroChina and domestic rivals are seeking technology to tap China’s shale gas resources through partnerships and acquisitions. Cnooc Ltd. acquired stakes in U.S. shale-gas acreage from Chesapeake Energy Corp. for a total of $1.65 billion in February 2011 and November 2010.

China, which has yet to produce shale gas commercially, may hold 1,275 trillion cubic feet (36 trillion cubic meters) of the fuel, almost 50 percent more than the U.S., according to the Energy Information Administration. The Chinese government held its first auction of shale-gas exploration rights last year.

“The overall environment is good for commercialization of unconventional gases, as tough carbon emissions guidelines have made natural gas the cleaner energy resource compared with oil and coal,” Mao said.

China plans to ease price controls and allow domestic fuel suppliers to earn a profit. Gas importers are losing money as they typically buy at overseas rates that are higher than the fixed domestic prices they are allowed to charge customers.

“The reform on the natural-gas price mechanism makes the commercial production of shale gas more likely, as a higher price will certainly provide more incentive for energy companies to speed up production,” Mao said.

–Guo Aibing and Chua Baizhen. Editors: Stephen Cunningham, Randall Hackley.

To contact the Bloomberg staff on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

SOURCE ARTICLE

FEBRUARY 2, 2012

– Shell aiming to exploit difference in price between U.S. gas and LNG, GTL

– Investment in U.S. gas exploration to be at lower end of planned spending

– Company to make further moves into oil-rich shales

By Alexis Flynn

Of DOW JONES NEWSWIRES

LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSA) is actively looking at ways to improve the profits it gets from U.S. natural gas, including seeking out land for a potential gas-to-diesel plant, the company said Thursday.

The Anglo-Dutch energy giant has invested heavily in U.S. shale gas assets, but new extraction techniques have led to abundant supply. Prices have fallen to a decade low and risk driving up the costs of Shell’s recent shale acquisitions. By contrast, the oil price has risen some 40% in the last two years.

“We have been looking for ways to leverage Shell’s strong resource position in North America,” said Chief Executive Peter Voser.

Chief Financial Officer Simon Henry said Shell was examining plans to develop the gas into products that are more closely linked to oil prices, such as liquefied natural gas for export and gas-to-liquids technology that turns gas into a transport fuel.

He said Shell was even seeking out land to build possible sites to build the types of facilities needed but cautioned that at a cost of “around $5 billion to $10 billion a project, we have to be selective.” Shell completed a giant gas-to-diesel project in Qatar last year, but its final cost was in the region of around $18 billion, rather than the $5 billion initially estimated in 2003.

Voser also said Thursday the company would broaden its focus to include oil-rich shale, with the company planning to spend $1 billion on liquid-rich shales alone in 2012, with production from the source expected to account for as much as 250,000 barrels of oil equivalent a day by 2017. By contrast, Voser said Shell’s expected outlay on U.S. gas exploration would be at the low end of its spending range given the weak pricing environment.

“Spending could be in the range of $5 billion and $6 billion per year on a worldwide basis over the next few years, including exploration, of which $3 billion to $5 billion could be North American gas plays,” said Voser.

The depressed U.S. natural gas price has compelled some U.S. firms to cut back on drilling. However, Exxon Mobil Corp. (XOM), the country’s largest natural-gas producer, said Wednesday it had no intention of curtailing its output.

-By Alexis Flynn, Dow Jones Newswires; +44 207842 9471, alexis.flynn@dowjones.com

SOURCE ARTICLE