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However, Shell also said it was delaying the launch of Qatargas 4 by as much as 10 months, from the start of 2010 until the end of the year. Mr. Voser said the timetable had been disrupted by delays at other LNG projects in Qatar involving other big oil companies, such as Exxon Mobil Corp, Total SA and ConocoPhillips.
Click to continue reading “Shell Expects Big Boost From Qatar Gas Projects”
By Rowena Mason
Published: 8:17PM GMT 24 Nov 2009
Delivering an update on Shell’s two flagship gas projects in Qatar, which are costing the group $21bn (£12.6bn), Mr Voser admitted that one – a liquiefied natural gas (LNG) plant – would overrun by about 10 months.
However, he said construction was on track for Pearl, the other development, to start producing in 2011. It will be the world’s largest gas-to-liquids facility when completed, having spiralled in cost from $5bn to $19bn since 2003.
Both projects will lift Shell’s output by 10pc – or 350,000 barrels per day – and contribute $4bn per year in revenues. “Qatar is key to Shell’s revival,” one analyst from Deutsche Bank said.
Increased capital expenditure is part of a turnaround strategy implemented by Mr Voser that will also see Shell shed 5,000 jobs and ramp up production.
Despite Shell’s history as Europe’s largest oil company, Mr Voser made it clear that gas production would overtake oil production by 2012, as 1bn electric cars hit the world’s roads over the next few years. A few years ago, Shell’s production was split 60:40 in favour of oil.
The International Energy Agency has forecast a gas glut and depressed prices until 2015, but Mr Voser insisted the medium to long-term outlook for demand was strong.
“We are intensifying our gas production because clearly it is the fossil fuel that has the lowest carbon dioxide content,” he said. “We will be more than 50pc gas by 2012 and increasing afterwards.”
The company will add 1m barrels per day to capacity by the end of 2012 – a growth rate of 2pc. But Mr Voser said that while Shell was impressed by the Nigerian government’s efforts to ensure a ceasefire in the troubled Delta oil region, the company would no longer aim for growth in the area.
The chief executive said Alaska could be the “next big area” for oil producers, adding that Shell would deliver proposals to Russia for a major gas development in Yamal by next Spring and is still negotiating on the Kirkuk oil field with the Iraqi government.
He also emphasised the potential of carbon capture and storage technology as key to Shell’s strategy to mitigate emissions from fossil fuels.
Mr Voser ranked it as the most important issue to be discussed at the Copenhagen climate change summit next month, but warned that Europe and the UK are losing leadership in this area as a result of being slow to grant funding and subsidies.
He also admitted for the first time that Shell would accept a minimum price on carbon credits to incentivise investment in clean energy. He said it ought only to be used in the early years of a global system.
LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSA) said Monday it was making good progress with the Pearl GTL and the Qatargas 4 projects in Qatar.
Click to continue reading “Royal Dutch Shell: Good Progress Of Pearl GTL, Qatargas 4″
LONDON, Nov 23 (Reuters) – Royal Dutch Shell (RDSa.L) said it had delayed one of its largest schemes by around a year with start-up for the $8 billion Qatargas 4 liquefied natural gas project now planned for late 2010 and the first cargo possibly pushed into 2011.
Click to continue reading “Shell delays Qatargas 4 LNG plant by a year”
In the light of the information printed below, how can anyone be expected to believe anything Shell says…ARTICLE PUBLISHED TODAY BY THE WALL STREET JOURNAL
NOVEMBER 23, 2009, 10:22 A.M. ET
LONDON (Dow Jones)–Royal Dutch Shell PLC’s (RDSB.LN) Pearl GTL in Qatar is expected to cost $18 billion to $19 billion, in line with its planned budget, a spokeswoman said Monday, underscoring progress made by the company in controlling its costs.
The news contrasts with the disclosure four years ago by the Anglo-Dutch oil company that costs at a giant Russian liquefied natural gas plant had doubled to $20 billion.
-By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; benoit.faucon@dowjones.com
COMMENT POSTED ON SHELL BLOG BY AN EAGLE EYED SHELL INSIDER
guest1
on Nov 23rd, 2009 at 4:56 pm
I just saw that Shell stated the costs for Pearl are estimated to fall between 18-19 billion dollar. And now it comes: this is in line with the planned budget! I do not have the stamina nor inclination to look back in the files or on the Donovan site, but I remember that the plan was around 4 billion. Exxon was bigger for a similar project, but they withdrew in time. Nice spin: 4 fold increase of project cost and then with a straight face say this is in line with the planned budget. Must be invented by the Brinded the Beard.
COMMENT BY JOHN DONOVAN
I do have the stamina and the inclination to expose Shell BS.
This is an extract from an article published by Energy Compass/Energy Intelligence on 22 July 2005.
“…it has broader implications for Shell, which despite its global leadership in LNG is developing an accident-prone reputation when it comes to project execution. Sakhalin is the latest in a series of flagship projects where it has failed to stay within budget. Costs have spiraled on the Athabasca oil sands project in Canada, on Bonga in Nigeria, and most recently on the Pearl GTL project in Qatar — priced at $5 billion at its launch last year, but now already creeping up to around $6 billion. “This type of high-profile project disappointment can do little to help Shell’s case when competing for new opportunities with host governments,” investment bank Citigroup says. “Following 30% cost overruns on Bonga and a 20% increase in cost estimates for Pearl GTL, resource holding governments must be paying attention.”
And from a Wikipedia article…
In 2003 the project cost was estimated to be US$5 billion. However after facing huge cost escalation it was reported to be $18 billion in 2007,[1] and according to Qatar Petroleum sources final project cost is expected to reach as high as $24 billion.[7]
Shell was found guilty by the financial regulators of fooling the markets in respect of its claimed proven oil and gas reserves. The fines, class action settlements and associated legal costs of the scandal, amounted to almost $1bn. Now the shysters in the company are apparently at it again, making claims directly at odds with the truth, in blatant breach of Shell’s business principles. Can we expect Shell’s Chief Ethics & Compliance Officer to intervene? Don’t hold your breath.
Shell posted a 62 percent decline in net income to $3.25 billion and Voser said the outlook “remains very uncertain” given forecasts that demand for crude will fall the most this year since 1980. Shell is cutting 5,000 jobs, equivalent to about 5 percent of its workforce, and has reduced operating costs by about $1 billion.
Click to continue reading “Shell seeks to reassure analysts on major projects”
“It’s a very challenging project, but so far so good,” Linda Cook, Shell’s executive director for gas and power, told reporters on the sidelines of a conference.
Click to continue reading “Shell says Qatar Pearl project tough but on track”
Qatar’s Pearl gas-to-liquids plant will come on stream by the end of next year, Saad al-Kaabi, a senior official at state-run Qatar Petroleum, said.
“That will be probably late 2010,” Al-Kaabi told reporters on the sidelines of the Petrotech conference, Reuters reported.
Royal Dutch Shell is building the 140,000b/d Pearl GTL complex at a cost of more than $18bn.
Click to continue reading “Gamble on gigantic LNG project is set to come good”
Royal Dutch Shell and Anglo American yesterday became the latest natural resources companies to shelve a clean energy scheme. Their joint A$5bn project in Australia to convert coal into liquid fuels may go ahead, eventually, but not with development costs this high and an oil price this low.
Click to continue reading “As Kermit the Frog observed, it’s not easy being green.”
: THE ARTICLE "Donovan email to Gavin White, Shell International Limited: 10 March 2010" has been updated with a self-explanatory email reply received on 11 March from Richard Wiseman, Chief Ethics & Compliance Officer, Royal Dutch Shell Plc.
: The Forbes article implies that by stopping sales of gasoline to Iran, Shell is complying with US sanctions. Shell's investments in the upstream sector in Iran are not mentioned, even though these are of far greater significance for both Shell and the Iranians.
: Amnesty International has been an informed and courageous critic of Human Rights abuses around the world for many decades and they are certainly not adverse to criticising governments in Nigeria, Burma, Zimbabwe and all around the world. The point about international companies like Shell is that they have a choice. They are not obliged to operate anywhere if they find that the local conditions are in conflict with their principles. Amnesty’s recent criticisms of Shell have certainly been strong and I am aware that in Shell there is a feeling that they have been unfair and to some extent uninformed. So a dialogue between Amnesty and Shell is very much to be welcomed. Amnesty is a highly respected organisation – indeed a former top executive of Shell, Sir Geoffrey Chandler, was a senior officer of Amnesty in his post Shell years.
: Same old, same old. Amnesty International and their human rights again go for the soft underbelly of the international companies rather than the real problem in Nigeia which is their corrupt Government. Good on Shell for attending and agrreing to being questioned. BUT, surprise, surprise nobody from the Nigerian Government (perhaps they didn't get enough of a bribe to appear or perhaps Amnesty knew they would get nowhere with them). Pollution in the Niger Delta remains a problem, albeit that conditions are slowly improving. Living conditions, infrastructure and most other normal day-to-day things should be the responsibility of the corrupt Government not international oil companies. These evil governments such as Nigeria, Zimbabwe and Burma need to be bought down by the UN so that their people might have a better chance of a reasonable life.
: Very polite correspondence between Wiseman and the Donovans. I estimate Wiseman's hourly internal tariff at around 500 U$ per hour (his salary plus support plus extensive overheads). Over the years Shell must have spent a fortune discussing the Donovans, putting the most expensive lawyers on the case, and developing policy how to battle them. It becomes Churchillian: 'we will fight them on the web, and in the courtrooms, and in their own offices and on the streets. But we wil NEVER surrender. With unlimited funds this maybe so, but it is wasting shareholders money and it solves nothing. I do not see the Donovans give up anytime soon. So perhaps a new paradigm needs to be developed? Any ordinary man or woman at the coalface would solve this problem within minutes and for less money than what is being burned now. But the Shell kings are no ordinary people, they live in cloud cuckoo land. I will keep following with great interest how all this develops, it is even better than the daily Dilbert!!!
: W.E. Pratt knew it already a hundred years ago when he said "Oil is found in the minds of men" But he was one of the founders of the Standard Oil company, whereas the people who try to make us believe that IBM can come to the rescue of Shell appear to be only good at getting rid of their most experienced minds.
: Oh dear, regarding this collaboration between Shell & IBM - it does not appear to have started off very well if I read the press announcement. I refer to the following: "Shell can reduce the educated guesswork and extract natural resources with more certainty and efficiency, thereby optimizing the recovery of oil and gas". Shell used to employ geoscience & petroleum engineering expertise. Is reserve estimation and production forecasting now in the hands of "educated guess workers"? That ought to really worry shareholders. The fundamental lack of understanding of the business gets even better with comments on geophysics: "For example, geophysicists must examine time-lapse seismic data from subsurface rock formations; reservoir engineers receive well and laboratory data, and geophysicists receive information - sound waves - covering wide spaces between the wells". Errr - what's the difference between the two geophysical activities quoted? Is this some IBM person speaking who has just bought a book "E&P for beginners", or is it the level of understanding within Shell now much of the real technical experience and expertise has been cleared out?
: Agree completely with Guest1. IBM once bought (and subsequently sold at a huge loss) a company called Tigress, and had plans for integrated Corporate Data Bases based on POSC. Unfortunately Schlumberger and Landmark know that part of the business rather better than IBM ever will. If Shell can't find oil with the help of Schlumberger and Landmark, what hope do they have with IBM?
: What a load of nonsense in the Forbes article. Shell and IBM to team up etc. We HAD all the expertise but that was removed by the HR and FN idiots that run Shell now. What does IBM know about oil and gasfields? This surely looks like another project, doomed to fail, whereby IBM is going to suck a lot of money out of Shell. Presumably Brinded bought a lot of stock in IBM. RDS appears more and more like an overweight blob, unable to move, being sucked out by the service industry and governments and waiting to die. The sooner someone takes over RDS, splits it up and gets on with the business, the better. The fact they accept all the abuse by the Donovans and are unable and unwilling to defend themselves speaks volumes. If RDS cannot even handle two old codgers with a website, how will they handle real competition???? John and Alfred, perhaps you have to increase the pressure and speed up the demise of RDS.
: A number of people both inside and outside Shell seem to share your view. A commonly held view inside Shell is that while decisions often turn out with hindsight to have been wrong, a far greater problem for Shell is their inability to make timely decisions when required.
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