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Financial calamity could engulf Shell in event of a Prelude FLNG or Arctic Disaster

Screen Shot 2014-02-10 at 16.29.29To the best of my knowledge, both Shell projects are fraught with danger, are pushing the bounds of technology, have attracted risk warnings from experts and are self-insured by Shell because no commercial contingency insurance specialists are willing to provide cover. 

By John Donovan

An article published today by Reuters gives some idea of the financial calamity that could engulf Shell in the event of  a Prelude FLNG or Shell Arctic drilling disaster, with potential for even more dire consequences. 

Extract from Reuters article published 18 April 2014 under the headline: “Compensation battle rages four years after BP’s U.S. oil spill

The oil company has spent over $26 billion on cleaning up, fines and compensation for the disaster, which killed 11 people on the rig and spilled millions of barrels of oil into the Gulf of Mexico for 87 days after the blast on April 20, 2010.  That is more than a third of BP’s total revenues for 2013, and the company has allowed for the bill to almost double… read more

Offshore drilling is at a slowdown

Ben van Beurden, Chief Executive Officer. Royal Dutch Shell Plc

Ben van Beurden, Chief Executive Officer. Royal Dutch Shell Plc

Extracts from an article by Jeff Nevile published Friday 11 April 2014 by oilvoice.com

Royal Dutch Shell Plc was one of the first to announce a plunge in profit this year as they announce a 48% drop. As Shell postponed their offshore drilling in Alaska, Chief Executive Officer Ben Van Beurden promised to slash capital spending to increase their return and cash flow performance. The question is, what is the duration of this spending cut going to be and how much damage is it causing the big players? read more

FT: Shell receives 100-plus serious bids for its Nigerian onshore stake

Screen Shot 2014-02-10 at 16.29.29Article published on 2 April 2014 by Seeking Alpha

Royal Dutch Shell’s (RDS.A, RDS.B) plan to sell much of its onshore Nigerian production has been met with skepticism – with oil stealing rife in the Niger delta, who would buy? – but FT reports Shell has received more than 100 serious bids for its 30% stake in five blocks valued at $3B-$5B. A clean exit from the delta woes would be an early win for new CEO Ben van Beurden, whose ascent was aided by the massive oil theft that contributed to January’s profit warning. read more

Peter Rees reappears but mystery remains over his exit from Shell

Peter Rees QC

Peter Rees QC

“Rees’ departure from Shell prompted much speculation in the City, given the company’s recent profit warnings, the on-going European Commission investigation into oil price-rigging and the arrival of new CEO Ben van Beurden.”Mr Rees has refused to comment on the circumstances of his unexpected and unexplained departure from Royal Dutch Shell during a financial crisis. 

By John Donovan

Peter Rees, until January Legal Director of Royal Dutch Shell Plc and an executive director of the company, has resurfaced at London Chambers “Thirty Nine Essex Street” as a counsel and commercial arbitrator. A considerable fall in prestige. He led a 1,000 strong legal department at Shell.

The reason for his sudden department from Shell days before the company issued a profits warning that shook the markets was said to be known by only three people other than Rees- Peter Voser, the retiring CEO, Ben van Beurden, the incoming CEO, and HR boss, Hugh Mitchell. read more

Shell Gas to Focus on Larger Projects as It Cuts Spending

Screen Shot 2013-12-22 at 19.09.52Extract from an article by Eric Yep published 25 March 2014 by The Wall Street Journal

SEOUL— Royal Dutch Shell PLC’s global gas division will focus on large ventures where it has more control while it is likely to continue trimming some holdings and unprofitable investments as part of a program of cost-cutting and asset sales, a senior gas executive with the company said. “We typically like projects that we have a bigger position in that we can influence more,” Maarten Wetselaar, executive vice president, Integrated Gas, said in an interview… The London-listed oil major issued its first profit warning in a decade in January… read more

Shell in slashing mode

Ben van Beurden, Chief Executive Officer. Royal Dutch Shell Plc

Ben van Beurden, Chief Executive Officer. Royal Dutch Shell Plc

Extracts from an article by EDUARD GISMATULLIN published by Bloomberg News on 14 March 2014 under the headline: Shell in slashing mode: Cuts Americas spending by 20% after losses in shales

THE HAGUE (Bloomberg) — Royal Dutch Shell plans to lower spending in the Americas by a fifth as Europe’s largest oil producer focuses on more profitable operations. It’s “not acceptable” that Shell, now deploying about 36% or $80 billion of its capital in North America, has been losing money, Chief Executive Officer Ben van Beurden said. Van Beurden has pledged to shrink spending costs this year and speed up asset sales including refineries after The Hague-based company issued its first profit warning in a decade. read more

Shell cuts spending in U.S. to lower shale exposure

Screen Shot 2014-03-14 at 00.25.04Extracts from a Reuters article by Karolin Schaps and Dmitry Zhdannikov published 13 March 2014

LONDON, March 13 (Reuters) – Royal Dutch Shell will cut spending by a fifth and lay off staff at its American exploration and production business, the company said on Thursday, in another sign that oil majors are struggling to profit from the booming U.S. shale sector. The spending cuts announced on Thursday follow Shell’s decision in January to suspend its controversial Arctic drilling programme and pledge to cut capital expenditure and streamline operations worldwide after the company’s least profitable fourth quarter in five years. “I don’t think it is a matter of trying to reinvent the company in a fundamentally different way; it is a matter of tackling some of the issues that we know need tackling,” van Beurden told journalists on a conference call after Thursday’s strategy update. read more

Shell Cuts Americas Spending by 20%, Extends Refinery Sales

Ben van Beurden, Chief Executive Officer. Royal Dutch Shell Plc

Ben van Beurden, CEO Royal Dutch Shell Plc

Extracts from an article by Eduard Gismatullin published on 13 March 2014 by Bloomberg News

Royal Dutch Shell Plc (RDSA) plans to lower spending in the Americas by a fifth as Europe’s largest oil producer focuses on more profitable operations. It’s “not acceptable” that Shell, now deploying about 36 percent or $80 billion of its capital in North America, has been losing money, Chief Executive Officer Ben van Beurden said.

Van Beurden has pledged to shrink spending costs this year and speed up asset sales including refineries after The Hague-based company issued its first profit warning in a decade. He also scrapped targets for cash flow, delayed drilling off Alaska and promised to restructure shale operations in North America. read more

Time for Plain Talking at Shell

Extracts from an article by ANDREW PEAPLE published 13 March 2014 by The Wall Street Journal

Screen Shot 2013-12-22 at 19.09.52Shell’s basic message to investors appears to be that the oil major will spend more on assets it think it will prove profitable, while getting out of assets it doesn’t think will do so well. To rekindle investor interest, Shell’s new chief executive Ben van Beurden will have to provide more than platitudes. Turning round the company will take more than even the most finely-chosen words. read more

Royal Dutch Shell Plc’s Profits Slump In 2013

Extracts from an article by Mark Stones publish 13 March 2014 by The Motley Fool

Screen Shot 2013-12-22 at 19.09.52Shell’s struggles have been well documented and a profit warning was announced in January. The shares have lagged the wider market over the last 12 months, falling 1.5%. In response Shell is cutting upstream spending in America by 20%, with the firm re-evaluating its shale operations… To bolster its capital strength the oil producer has embarked on a programme of asset sales…

FULL ARTICLE

Shell says some North Sea assets may be added to the firesale

Ben van Beurden, Chief Executive Officer. Royal Dutch Shell Plc

Ben van Beurden, CEO, Royal Dutch Shell Plc

Extracts from an article by Martin Flanagan published on 13 March 2014 by The Scotsman under the headline: “Shell says some North Sea assets may be for sale”

OIL giant Shell suggested today that some of its “mature” North Sea energy assets may be for sale after a string of production breakdowns last year and as it seeks to rein in its growth plans under its new chief executive. Ben van Beurden, who took the helm 10 weeks ago, said in a presentation to financial markets: “We have to be honest with ourselves. The North Sea has disappointed for Shell in 2013. We are looking carefully at cases of unplanned downtime (of rigs).” read more

Former Shell boss’s pay halved after poor performance

Extracts from a Reuters articled published Thursday 13 March 2014

Screen Shot 2014-01-03 at 14.32.05(Reuters) – The pay of Royal Dutch Shell’s former chief executive, Peter Voser, halved to $11.24 million last year following what the company described as a disappointing performance. Shell suspended its controversial Arctic drilling programme earlier this year and pledged to cut spending and streamline operations following disappointing earnings in the fourth quarter of 2013 that were the least profitable for five years. “The business performance in 2013 was disappointing. This is reflected in the reward outcomes for the year,” Shell’s head of remuneration committee Hans Wijers said on Thursday. The company said it had also trimmed the base salary of new chief executive, Ben van Beurden, to reflect shareholder sentiment. He will receive a base salary of 1.4 million euros ($1.95 million) compared with Voser’s 1.64 million euros. read more

Former Shell chief paid £22m over two years despite profit warning

Article by Terry Macalister published by TheGuardian.com Thursday 13 March 2014

Annual report reveals how Peter Voser made enormous gains through share awards and other performance-related bonuses

Screen Shot 2014-03-13 at 10.01.32

Former chief executive Peter Voser left Shell at the turn of the year. Photograph: Guido Benschop/AFP/Getty Images

Shell paid former chief executive Peter Voser £22m over two years even though there was a profit warning soon after he left and his successor says the business has failed to perform as strongly as it should have done.

The 2013 annual report published on Thursday shows that Voser, who left at the turn of the year, received total remuneration of just over £7m last year and almost £15m in 2012. read more

Royal Dutch Shell profits hit during ‘challenging’ 2013

Screen Shot 2014-03-12 at 14.18.21Article published by BBC News 13 March 2014

Royal Dutch Shell had a “challenging year” in 2013 in part due to a deteriorating security situation in Nigeria, the company said.

Profits from refining operations were hit in Asia and Europe by an oversupply of global capacity and lower demand, the company said.

Annual profits at Royal Dutch Shell fell to $16.75bn (£10.05bn), from $27bn in 2012.

Nevertheless, the company said it has “laid firm foundations for the future”.

Several areas of Royal Dutch Shell’s business had operated below their full potential in 2013, chief executive Ben van Beurden said. read more

Little known key role of Michiel Brandjes in Shell reserves scandal

Screen Shot 2014-03-09 at 23.42.12However, unbeknown to Van de Vijver, Michiel Brandjes (right), who was alarmed by the findings of the report, sent a copy to a New York law firm Cravath, Swaine & Moore. This meant that events were no longer in the control of Shell. Instead, Shell’s most sensitive issue since its close association with Adolf Hitler and the Nazis several decades ago, had been disclosed to an outside firm, that had to consider and protect its own reputation.

By John Donovan

In May 2003, Frank Coopman, the then Chief Financial Officer of Shell EP, delivered bad news about Shell’s operations in Nigeria to the Chief Executive of Shell EP, Walter van de Vijver.

Van de Vijver sent Coopman back to Nigeria to investigate further.

The subsequent findings, set out in a status report, were even more devastating, revealing an overstatement of 1.1 billion boe.

Van de Vijver had instructed a team led by Coopman to work on the reserves issues.

The team included a top Shell lawyer, Michiel Brandjes, the then Company Secretary of Royal Dutch Petroleum. read more

Shell says ex-Deutsche Bank CEO Ackermann to retire from board

Extract from an article by Sarah Young published on Mon 3 March 2014 by Reuters

Screen Shot 2014-02-10 at 16.29.29(Reuters) – London-listed oil company Royal Dutch Shell (RDSa.L) said board-member Josef Ackermann would retire as a non-executive director at its annual meeting in May.  Shell’s annual meeting is scheduled for May 20. The company is holding a management day on March 13, when it will attempt to win round investors after a major profit warning in January.

FULL ARTICLE

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