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.’

REUTERS

(Reuters) – Australia Arrow Energy Ltd (AOE.AX) has opened its books to Royal Dutch Shell (RDSa.L) and PetroChina (0857.HK) for them to conduct due diligence for their joint takeover offer worth at least A$3.3 billion ($3.03 billion) sources said on Wednesday.

One of the sources said Arrow is expected to make a response on the offer within days. ($1=1.088 Australian Dollar)

(Reporting by Fayen Wong; Editing by Michael Perry)

REUTERS SOURCE ARTICLE

March 17, 2010: Robin Pagnamenta Energy Editor

Royal Dutch Shell will sell full or part-stakes in as many as 9,000 petrol stations worldwide and cut a further 1,000 jobs as it intensifies its global cost-cutting.

The announcement came as Shell appeared to be edging closer to a deal with Arrow Energy to bolster the group’s position in Australia’s fast-growing industry supplying coal-seam gas to China and South-East Asia.

Peter Voser, the chief executive, said that Shell intends to leave about 30 of the 90 countries in which it operates petrol stations. The move, which is already under way, is part of a focus on more profitable markets and on exploration and production.

“We are leaving retail markets where we have low volumes,” Mr Voser told Shell’s annual strategy briefing in London. These would include Greece, Sweden, Vietnam and New Zealand.

Globally, Shell holds interests in about 45,000 petrol stations, of which just under 30,000 are operated directly by the company. Yesterday it indicated that by 2012 it would sell about 2,000 sites outright and cut the number that it operated directly by almost 7,000.

Sites no longer operated directly would follow a model that Shell has pioneered in America, where its retail sites retain the Shell brand and are supplied wholesale by the company but are operated by third parties.

Shell is selling fuel stations in Spain and Portugal. In France, it will leave many of its smaller, regional stations but plans to retain its more profitable, high-volume motorway network.

Britain, where Shell operates about 900 fuel stations and is the biggest player by volume in the retail market, is not expected to bear the brunt of the sales.

Richard Savage, of Mirabaud Securities, said that the move reflected an effort “to release capital to spend more on production”.

The announcement came as Mr Voser said that Shell expected to boost crude oil production by 11 per cent to 3.5 million barrels a day by 2012, up from 3.15 million — reversing seven years of consecutive declines. “All this is underpinned by a new wave of project start-ups,” Mr Voser said. “Beyond that we have an upstream portfolio that can grow to at least 2020.”

He also announced a further 1,000 job cuts, raising the total expected to 7,000 during 2009-11. Shell employed about 102,000 people before Mr Voser revealed the first phase of his reorganisation last July.

He called for “more focus and more urgency”, adding that most of the cuts would be in refining and marketing — which is struggling in the face of the worst industry downturn in 20 years — and in middle management. “The company had become too complicated and slower to respond than we’d like, so we are sharpening up,” he said.

The chief executive’s remarks came as Arrow Energy said that it was in “active discussions” with Shell and Petrochina over their joint $3 billion takeover offer.

Shell, which confirmed the talks but declined to comment, also announced positive news on the discovery of new supplies of oil and gas. The company said that 2009 was the “best year for exploration in a decade”, after finds in Australia and the Gulf of Mexico gave it new reserves equal to almost three times the amount of oil and gas that it produced.

Shell’s reserves at present production rates had increased from ten years at the end of 2008 to 11.9 years at the end of 2009.

TIMES ARTICLE

• Shell to quit 9,000 petrol stations worldwide

SOURCE ARTICLE

A stream of analyst comments and silence on the offer from the Australian coal-seam gas group has fuelled expectations that Arrow will reject the bid and the two parties will have to come in with a higher – and hostile – offer. Last week, Shell and PetroChina offered A$4.45 in cash for each Arrow share, plus a share in a new, international Arrow entity.

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

March 15 (Bloomberg) — Arrow Energy Ltd. may reject a A$3.3 billion takeover offer from Royal Dutch Shell Plc and PetroChina Co., the Australian Financial Review reported, without saying where it got the information. The time Arrow has spent evaluating the offer and analysts’ comments that the bid is too low have led to speculation the proposal will be rejected, the newspaper said.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

SOURCE ARTICLE

By James Paton

March 12 (Bloomberg) — Royal Dutch Shell Plc and PetroChina Co. may need to increase their offer by as much as 55 Australian cents a share to A$3.7 billion ($3.4 billion) to acquire Arrow Energy Ltd., said an analyst at RBS Morgans.

“Shell and PetroChina may have to sweeten their offer for Arrow to as much as A$5 a share,” Nik Burns, a Melbourne-based analyst, said in a note to investors. While the companies may need to raise the bid to at least A$4.80 a share, the transaction is “more than likely to proceed,” said Burns, who predicted last month that Shell may make an offer for Arrow.

David Williams, a Shell spokesman in the Hague, and Andrew Barber, spokesman for Brisbane-based Arrow, both declined to comment.

Shell and PetroChina offered A$4.45 a share for Arrow’s Australian coal-seam gas business, the company said on March 8. That values the proposal at about A$3.3 billion. Shareholders would also get stock in a new company comprising Arrow’s international assets.

If Shell is successful, the company may move fast to acquire AGL Energy Ltd.’s coal-seam gas interests in Queensland’s Bowen Basin, potentially for A$900 million, Burns said. Sydney-based AGL may sell its 50 percent stake in the Moranbah field should Shell acquire Arrow, it said yesterday.

Shell and PetroChina may be bidding for Arrow as part of a 50-50 joint venture, according to Burns.

–Editors: Alex Devine, Raj Rajendran.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

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

SOURCE ARTICLE

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

March 9 (Bloomberg) — Royal Dutch Shell Plc and PetroChina may need to increase their bid for Arrow Energy Ltd. by as much as 18 percent to A$3.9 billion ($3.5 billion) based on similar transactions in Australia, Sanford C. Bernstein & Co. said.