John

Interesting that a Canadian company in Argentina is apparently far more responsive to local pressure than Shell in Canada, Ireland, Nigeria….

If Shell had taken a similar approach to Osisko, development of tar sands, Corrib, and shales would never have occurred. Perhaps Shell could learn something here?

(ARTICLE AND COMMENT SUPPLIED BY A REGULAR CONTRIBUTOR)

1 February 2012

Canadian mining company Osisko has suspended a gold mining project in Argentina after protests by locals.

Osisko said it would put its operation in north-western La Rioja province on hold if it did not get the backing of the local population.

Hundreds of people protested at the Canadian embassy in Buenos Aires last week, saying that the Famatina project would pollute the environment.

Osisko says it conducts environmentally responsible exploration.

Local residents, supported by environmental groups such as Greenpeace, had been holding a series of protests against the project.

Vocal opposition

On 2 January they barricaded the main road leading to the site, a blockade which still remains in place.

On Thursday, demonstrators marched on the governor’s office in La Rioja, demanding that Governor Luis Beder Herrera heed their demands to stop the project, or resign.

And on Friday, a delegation travelled to the Canadian embassy in Buenos Aires to make its opposition to the project known.

The protesters say mining of the Famatina mountain would require a million litres of water a day and the use of cyanide to extract precious metals.

Osisko said Famatina was still only an exploration project, with “no current plan, design or intent for any mining operations”.

The company said that the development of the mine was still highly hypothetical, since little was known about the amount, quality and location of its mineral resources.

In a statement published on its website, Osisko said it would prepare an information and consultation programme about the project.

It said that if “there was no social license for exploration and development around the Famatina project area, no work would be conducted”.

SOURCE ARTICLE

By Alexis Flynn, Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- When Europe’s major oil companies reported quarterly earnings last week, headlines across national capitals once again excoriated the petroleum giants for soaring profits in the face of consumers anger at high fuel prices.

Yet the profits couldn’t mask a trend that continues to trouble Wall Street and corporate boardrooms: Nearly every major oil company reported year-on-year oil and gas output declines, often in the double-digits.

Big Oil is throwing huge resources at the problem with more open embrace of unconventional petroleum developments, high-risk exploration in frontier areas and corporate restructuring. But even if these strategies work in some cases, there is little doubt that anemic petroleum output signals a long-term challenge confronting the sector.

The particulars varied across the sector. BP PLC’s (BP) 11% output drop was fueled in part by the continued hit from its reduced activity in the U.S. Gulf of Mexico after last year’s disastrous spill. Italian giant Eni’s (ENI) production fell 15% due to its disproportionate exposure to war-ravaged Libya. Spain’sRepsol YPF SA (REP.MC), whose output fell 17%, was affected by both Libya and the U.S. Gulf, as well as by labor unrest in Argentina. Norway’sStatoil ASA (STO) saw a16% output decline largely on production outages and maintenance in its home market in the North Sea.

Oil giants are more vulnerable to operational problems in part because of their declining dominance over key resources. Whereas in 1973, independent oil firms controlled three-quarters of the world’s reserves, they hold as little as10% today, according to some estimates. That has forced oil majors to rely to a greater extent on costly unconventional plays such as shale gas, deepwater exploration, and Arctic exploration.

Investment in conventional assets accounted for 63% of the majors’ total capital expenditure between 2001 and 2005, research by Wood Mackenzie showed, with this proportion set to fall to 40% between 2011 and 2015.

Last week’s reports showed that the two biggest oil giants, Royal Dutch Shell PLC (RDSA) and Exxon Mobil Corp. (XOM), were somewhat better positioned than their smaller peers, in light of their capacity to progress capital-intensive projects. Another standout, Wall Street darling BG Group PLC (BG.LN), the only European oil major to report higher year-on-year output, has prospered from recent discoveries in the hot Brazil offshore region.

Yet there are problems even with these templates. Though demand for natural gas remains solid, natural gas prices could see further weakness in light of surging North American shale gas output and economic weakness in Europe and the U.S.

The push for more exploration has ignited interest in Africa following new seismic results and recent discoveries in Ghana and Uganda. But it’s a risky and capital-intensive game and one requiring a fleetness of foot to grasp opportunities and adapt quickly to contrary political circumstances. Industry anecdotes abound of how some of the most lucrative recent discoveries on the continent were once passed up by reluctant majors.

Consolidation offers another way forward, yet few expect large corporate mergers between integrated oil giants in light of antitrust concerns and today’s high oil prices. More likely is a deal akin to Exxon’s purchase of U.S. unconventional gas specialist XTO, a major factor in Exxon’s standout 10% rise in production in the quarter. Wood Mackenzie’s Simon Flowers predicts more such “infill acquisitions,” but says “large-scale acquisition is not likely in the near term.”

Another possibility is the flowering of deals between private oil giants and emerging state-controlled firms like Brazil’s Petrobras, Russia’sRosneft (ROSN.RS) and China’s CNPC. BP‘s failed share swap and Arctic exploration deal with Rosneft was an example and illustrates the lengths to which companies are prepared to go to gain access to their potentially lucrative reserves.

Wall Street will likely push harder for some sort of tangible action from Big Oil in the coming months. The sector trades at a significant discount to the oil price itself, a factor that could sharpen calls for share buybacks and more special dividends. The recent move by ConocoPhillips (COP) to hive off its downstream business lifted the Texas company’s share price and spawned questions for the rest of the sector. But so far, most of Conoco’s peers have dismissed the idea as impractical in light of the advantages of the conventional integrated model.

-By Alexis Flynn, Dow Jones Newswires; +44 207 8429471, alexis.flynn@ dowjones.com

(END) Dow Jones Newswires 07-31-111009ET

Copyright (c) 2011 Dow Jones & Company, Inc.

SOURCE ARTICLE

By John Donovan

In the article below, part of a major PR campaign, Shell Oil President Marvin Odum (right) asks a public concerned about Shell onshore operations, including hydraulic fracturing (fracking), to place its trust in the integrity of Shell and its global operating principles.

It is therefore timely to reflect on the repeated assurances of Shell business principles and code of ethics contained in the Form 20-F returns Shell filed with the U.S. Securities & Exchange Commission in the run up to the reserves scandal, which turned out to contain fraudulent declarations of oil and gas reserves.

There are links below to one such declaration filed by Shell in March 2003: Every page was marked “FOIA Confidential Treatment Requested” – a request for exemption from the U.S. Freedom of Information Act. This particular Form 20-F was filed 10 months before news of the reserves scandal broke.

Why should anyone believe Shell this time, when it conned investors and the public so recently in one of the biggest securities frauds in history? A scandal which brought to an end the Shell Transport/Royal Dutch Petroleum partnership which had lasted for a 100 years.

Examples of the repeated references to Shell business principles and related code of ethics can be found on pages 2,12 & 23 of “Part 3″ accessible below.

Form 20F Return in 5 Parts

Part 1 (31 pages)

Part 2 (31 Pages)

Part 3 (41 Pages) (see pages 2, 12 & 23)

Part 4( 41 Pages)

Part 5 (39 Pages)

Examples of news articles arising from the fraud:

The Times: How Shell blew a hole in a 100-year reputation: 10 January 2004

The West Australian: Investors howl for Shell’s blood: 12 January 2004

London Evening Standard: Shell bosses lied to the City: 19 April 2004

(Former executives, led by ex-chairman Sir Philip Watts, admitted they had repeatedly lied to investors about the true level of Shell’s oil and gas reserves.)

Houston Chronicle: ‘Sick and tired about lying’ at Shell: 19 April 2004

Bloomberg: Shell Loses AAA Credit Rating: 19 April 2004

Shell bosses ‘fooled the market’: 19 April 2004

The Guardian: Trail of emails reveals depths of deceit at the heart of Shell: 20 April 2004

he Guardian: Shell admits it misled investors: 20 April 2004

The Independent: Lies, cover-ups, fat cats and an oil giant in crisis: 20 April 2004

The Scotsman: Shell admits reserve ‘lies’: 20 April 2004

SHELL ARTICLE: Shell Principles Provide Framework, Accountability for Company’s Global Tight/Shale Oil and Gas Operations

ASPEN, Colo., June 29, 2011 /CNW/ — Today, from the 2011 Aspen Ideas Festival, Shell makes its Global Onshore Tight/Shale Oil and Gas Operating Principles available to the public with examples of how the company delivers them. Shell has a rigorous set of five global operating principles that provide a tested framework for protecting water, air, biodiversity, and the communities in which Shell operates.

Shell is openly sharing these operating principles to address public concern about tight/shale oil and gas development – especially regarding hydraulic fracturing – encourage feedback and challenge from our stakeholders, and drive continuous improvement. Shell also supports regulation and enforcement that reinforces responsible operating practices and continues to improve the industry’s overall performance.

“We understand there is concern around the development of shale gas, and we must give the public more knowledge of how we operate,” said Marvin Odum, President, Shell Oil Company. “People have asked the industry for transparency; we have listened and are responding.”

Specific on water, hydraulic fracturing has attracted a great deal of attention in recent months. As an example of how we deliver these principles, which are now described online, Shell mandates a stringent well construction standard that focuses on the use of safe drilling and completion processes, including reducing the risk of water contamination.

Further, Shell supports the disclosure of chemicals used in hydraulic fracturing fluids, monitoring of groundwater, and a reduction in the amount of water used in the drilling process. Shell does not fracture wells unless it has pressure tested the wellbore for integrity. And, the company recycles as much water at each project as reasonably practicable. For example, in the Marcellus Shale, Shell recycles almost 100% of produced fluids, substantially reducing our fluid waste and reducing the amount of water volumes needed for hydraulic fracturing.

In the last decade, the industry has discovered an abundance of natural gas. Of the world’s 250-year supply of gas estimated by the International Energy Agency (IEA), almost half is contained in shales, tight sandstones, and coal beds. More than one-third of the global gas-production increase, forecasted by the IEA over the next 25 years, could come from these sources.

“If the innumerable benefits of natural gas are to be realized, we must address the concerns of citizens and share the principles that we hold ourselves to at Shell,” said Odum. “These principles manage the risk we know exists when producing energy, but just as importantly, they demonstrate our operational integrity and focus on collaboration, underpinning our belief that natural gas can be produced safely and responsibly.”

Francesca Steele: May 28, 2010

Royal Dutch Shell has agreed to buy East Resources, the US natural gas explorer, for $4.7 billion (£3.2 billion).

The Amsterdam-based oil and gas giant said that it had struck a deal with East Resources and its private equity investor Kohlberg Kravis Roberts to acquire “subsidiaries which own substantially all of the business”.

East Resources has more than 650,000 acres in the Marcellus shale, a rock formation running from West Virginia to New York, which is said to contain vast amounts of natural gas. It produces the equivalent of almost 10,000 barrels of oil a day.

The deal is pending regulatory approval.

Shell said that it had also acquired 250,000 acres of mineral rights in the Eagle Ford shale in South Texas and would be the only operator in the area.

Peter Voser, the chief executive, said: “East Resources’ management have built an excellent organisation, with high-quality assets in the Marcellus, which we are pleased to have as our centrepiece as we enter the premier shale gas play in the northeast US.

“The opportunity now is to consolidate our tight gas portfolio, divest from non-core positions across North America, and to invest for profitable growth by deploying Shell’s technology and capabilities on a large scale.”

Last month Shell reported a 49 per cent increase in first quarter profits after cost-cutting drive that led to the loss of 5,000 jobs last year, with another 1,000 to come this year.

Results were also bolstered by the start of two big oil and gas projects on the island of Sakhalin in Russia and at Parque das Conchas 70 miles (110 kilometres) off the coast of Brazil.

These added 120,000 barrels of oil to Shell’s daily production, helping to lift its average output by 6 per cent to 3.59 million barrels per day. The increase has helped to reverse Shell’s seven years of declining production.

TIMES ARTICLE

INVESTOPEDIA

Posted: Apr 08, 2010 08:19 AM by Eric Fox

Royal Dutch Shell (RDS.A, RDS.B) is accelerating its investment in the United States to meet its interim and long-term production goals outlined at a recent strategy update. The company is investing in both the onshore and offshore areas here, as it pursues multiple exploration and development projects.

Royal Dutch Shell hopes these and other investments will enable the company to reach daily production of 3.5 million barrels oil equivalent (BOE) by 2012, an 11% increase from current production.

Gulf of Mexico
Royal Dutch Shell has been active in the Gulf of Mexico for many years, and currently has 370,000 BOE of net production here.

The cornerstone of growth in the Gulf of Mexico is the newly-constructed Perdido facility, located 200 miles offshore in approximately 1.5 miles of water. The facility consists of a floating production platform attached to a spar that is moored to the ocean floor with cables and other attachments.

The Perdido spa will serve as infrastructure to develop three offshore oil fields – the Great White, Tobago and Silvertip Fields. These fields are spread over nearly 30 square miles, and the facility is designed for peak production of 100,000 BOE per day.

Royal Dutch Shell owns 35% of Perdido, with Chevron Corp (NYS:CVX) and BP (NYSE:BP) owning 37.5% and 27.5%, respectively.

Gulf of Mexico Exploration
The company is also active on the exploration front, and highlighted its successes in the Gulf of Mexico in 2009. The company participated in a successful well at the Vito prospect in July 2009, and then followed that up with a successful appraisal well in March 2010. Anadarko Petroleum (NYSE:APC) and Statoil ASA (NYSE:STO), have a 20% and 25% interest in the Vito prospect, respectively.

North American Unconventional
Royal Dutch Shell is also jumping on the unconventional resource bandwagon, and has built up a large acreage position in North America. The company has done this through joint ventures and acquisitions, accumulating several million prospective acres and 21 Tcfe of potential reserves.

Royal Dutch Shell has leased up 150,000 net acres in the Eagle Ford Shale, a booming unconventional resource play in south Texas. The Eagle Ford Shale has several different productive areas, including ones that produce dry gas as well as natural gas liquids and oil.

In the Haynesville Shale, Royal Dutch Shell signed a joint venture with EnCana (NYSE:ECA) to jointly develop acreage. The joint venture will operate as many as 25 rigs in 2010.

The Bottom Line
The onshore and offshore United States is fertile ground for Royal Dutch Shell and the rest of the exploration and production industry, as they seek to increase production to meet the demands of both investors and energy consumers. (To learn more, see our Oil And Gas Industry Primer.)

Besides ExxonMobil’s big bet, Royal Dutch Shell and China’s biggest oil company are spending billions of dollars buying shale and coal seam companies in Australia with a view toward converting it into LNG and shipping to China.

FROM A SHELL INSIDER

Shell now growing in biofuels? A few years ago Shell was going to corner the solar cell business. That has been closed down. Then Shell was growing the hot air of the windmill business. They also withdrew from a huge UK project. Shell needed reserves so expanded in the tarsand business. The (negative) environmental impact is beyond belief. So that project is scaling down as well for some obscure reason. Of late oilshale is becoming popular again, Shell even recruited a corrupt US official for it so they must be serious. But I predict this will also soon fizzle out. And now strong growth in the biofuel. This will destroy Brazilian rainforests, pressure from environmentalists will be mounting and before too long this will also be scaled down. Billions of capital destruction and no consequences for the people at the top. They resemble exactly like modern day politicians, only good at surviving and reaping personal benefits while it lasts.

Why doesn’t Shell learn from Exxon: remain focused on producing oil and gas and do it profitable. Every year a bit better than the year before. Steady and relentless. But I fear the internal know-how has been replaced by woolly language, political correctness and dependence on contractors who will steal Shell blind because if you cannot do it yourself anymore, you also cannot manage it. There has been no coherent policy for future business for years.

About time Voser wraps it up and sells off Shell in large parcels and get it over and done with.

SHANGHAI (Dow Jones)–China has started its first joint development project in shale gas, in a bid to find alternative resources for the cleaner-burning fuel to meet the nation’s rising demand.

THE WALL STREET JOURNAL

September 18, 2009, 9:08 AM ET

By Ashby Jones

Gale Norton, a secretary of the interior in the Bush Administration, now works as an in-house lawyer in Denver for Royal Dutch Shell. In 2006, while she was still in office, her department granted three tracts in Colorado to a Shell subsidiary for shale exploration. Also while in office, she reportedly had conversations with the oil company about future employment.

Was her discussing potential job opportunities at the time illegal? The Justice Department is investigating. Click here for the NYT article, here for the WSJ story, here for the LA Times piece that broke the story.

DOJ sources told the WSJ that the investigation is still in its early stages.

A Shell spokeswoman said the company has been notified of an investigation by the government, but declined to comment further. The spokeswoman told the WSJ said Norton wasn’t available for comment.

During Norton’s tenure at Interior, she came under criticism from the agency’s inspector general, Earl Devaney, for tolerating what he characterized as a pattern of ethical lapses involving agency officials, including her deputy, Steven Griles. Griles pleaded guilty in 2007 to lying before a Senate committee about his ties to Jack Abramoff, the disgraced lobbyist who is now in prison.

The department’s dealings with energy companies that lease government-managed land have been frequently faulted. Last fall, an investigation by Devaney’s unit found that employees at an Interior Department office responsible for collecting royalties from oil and gas companies broke government rules by accepting gifts from and having sex with industry representatives.

Earlier this week, the Obama administration announced the termination of a program—administered by the same office—that allows companies to give the government in-kind payments for oil and natural gas taken from federal land and waters, rather than paying cash royalties. Interior Secretary Ken Salazar said the program would be replaced by “a more transparent and accountable” payment system.

WSJ ARTICLE