By LAURENCE ILIFF

MEXICO CITY—Mexican oil company Petroleos Mexicanos has filed a motion to add ConocoPhillips and subsidiaries of Royal Dutch Shell PLC to a 2010 suit in U.S. federal court that seeks damages against companies that had allegedly purchased natural-gas condensate that Pemex said was stolen from its operations in northern Mexico.

In a proposed amended suit that was attached to the motion, Pemex, as the state-owned company is known, said it doesn’t allege that either company “acted with intent or knowledge or that it was part of any conspiracy,” but it does allege that they are liable for “transactions involving the stolen property of Mexico.”

ConocoPhillips didn’t immediately comment Thursday. Shell said it had been notified about the suit, but declined to comment per company policy. Pemex didn’t immediately issue a statement on its latest filing.

The motion to amend the suit to add the additional companies was filed at the Southern District Court of Texas in Houston last week.

In the proposed amended suit, Pemex alleges ConocoPhillips purchased an estimated $35 million in stolen condensate from two other companies after the fuel had been “laundered” through resales to hide its origin.

The plaintiff in the original suit is the exploration and production division of Pemex, or PEP for its Spanish-language initials, which operates natural-gas operations in northern Mexico. Pemex added additional defendants to the original suit last year, bringing the total at that time to more than a dozen.

Last year’s suit followed a criminal investigation by U.S. authorities into a cross-border smuggling scheme that has resulted in the conviction of at least five people since late 2008.

Pemex said in its original suit it believes organized-crime groups have stolen more than $300 million in condensate since 2006 by robbing storage facilities and hijacking tanker trucks.

Petroleum condensates, like propane and butane, are byproducts of the production of natural gas. Pemex doesn’t typically sell the condensate, but instead uses it in its own oil refineries.

—Angel Gonzalez and Chad Bray contributed to this article.

Write to Laurence Iliff at laurence.iliff@dowjones.com

SOURCE ARTICLE

Comment: this also occurred in the 1980′s at Shell’s Dutch subsidiary, NAM, where large volumes of condensate produced from the Groningen “dry” gas field were sold and used as diesel fuel in road vehicles. It was only after an investigation by the authorities into the use of untaxed road fuel that NAM “discovered” their loss.

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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The share price of oil and gas firm Woodside dipped on Friday after oil major Shell announced it would sell its stake in the Australian company.

3rd February 2012

PERTH (miningweekly.com) – The share price of oil and gas firm Woodside dipped on Friday after oil major Shell announced it would sell its stake in the Australian company.

Royal Dutch Shell CFO Simon Henry said overnight that its 24.27% stake in Woodside no longer fitted the company’s long-term plans, and would be sold when the time and price was right.

The oil and gas major said that divestments were expected to reach between $2-billion and $3-billion in 2012.

In its upstream portfolio, Shell was expecting some 250 000 barrels of oil equivalent a day of asset sales and licence expiries over the 2012/17 timeframe, and assuming that these impacts played out, oil and gas production was expected to average some four-million barrels of oil equivalent a day in 2017/18, an increase of some 25% from the 2011 levels of 3.2-mllion barrels of oil a day.

Shell reported that during 2012, the company would invest some $30-billion in capital, of which around 60% would be spent in North America and Australia.

CEO Peter Voser said that the company’s strategy was innovative and competitive, with its improving financial position creating an opportunity to increase both its dividends and its investment levels.

“We have worked hard to generate a strong pipeline of investment opportunities for Shell, and we put the emphasis firmly on a competitive financial performance. Shell’s investment programme creates cash flow growth, which in turn funds our dividends,” said Voser.

“All of this is supported by efficiency gains from our continuous improvement programmes where the opportunity set runs to billions of dollars for Shell.”

Woodside fell to A$33.85 a share, from Thursday’s closing price of A$34.15 a share. By late afternoon, the stock traded at A$34.09 apiece.

Fuel giant Shell has been accused of “moral bankruptcy” for announcing profits of £18billion – just a month after closing its final salary pension scheme for new recruits.

Fuel giant Shell has been accused of “moral bankruptcy” for announcing profits of £18billion – just a month after closing its final salary pension scheme for new recruits.

The multinational’s haul soared 54% last year thanks to sky-high oil prices caused largely by political tensions in the Middle East. But union leaders accused the firm of raking it in while hammering workers.

Unite general secretary Len McCluskey said: “Shell reminds us of the moral bankruptcy of the corporate elite. The company is needlessly closing its final salary scheme while posting colossal profits.

“This is predatory capitalism in action. Shell is one of the world’s richest and most powerful corporations. It can afford to keep the final salary scheme open to new entrants.

“Rather than provide security to its future staff and still make a profit, it has chosen greed. Shell is not alone.”

Drivers are unlikely to toast its success either as they’ve been paying through the nose at the pump. Shell says it doesn’t make much cash from its forecourts, backed by figures showing that the firm’s downstream arm, which includes refineries and petrol stations, lost £175.6million last year.

AA president Edmund King said: “It is ironic that at a time of record oil company profits we are suffering from a lack of refining capacity which can affect pump prices.

“It would be helpful if oil companies could divert some of their profits into ensuring the future of Coryton and other essential refineries.”

Royal Dutch Shell, to use the firm’s full name, made £4.1bn in the final three months of 2011 alone – up 13% on the previous year. Shell has outshone its troubled rival BP in recent years and yesterday vowed to up its dividend to shareholders for the first time since 2009.

SOURCE ARTICLE

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

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