Posts Tagged ‘Simon Henry’

April 29, 2011

LONDON, April 29 (UPI) — Royal Dutch Shell suggested it might pull out of developments in the North Sea because of a tax increase imposed by the British government, a director said.

British Chancellor of the Exchequer George Osborne imposed a duty on oil and gas producers in an effort to take advantage of massive oil profits reported by international energy companies.

Oil and gas developers posted record first quarter profits as energy prices soar in response to global economic recovery, a weak U.S. dollar and unrest in some of the Middle East’s largest oil-producing nations.

Simon Henry, financial director at Shell, was quoted by London’s Daily Telegraph as saying Osborne’s tax would have “significant impact” on the company’s plans. He added that his company might not move forward with North Sea development because of the tax.

Shell posted $6.9 billion profit for the first quarter of 2010 though production was down modestly compared with the same period last year.

SOURCE ARTICLE

SHELL is slashing investment in the North Sea over a Budget Day tax hike – despite making £1.9million an hour.

The giant yesterday revealed the rise meant it was now “uneconomic” to develop smaller UK oil and gas fields.

Shell’s quarterly profits were up forty per cent and totalled £4.1billion.

Chief finance officer Simon Henry said the group would only invest in two new projects. Other work has gone. He said: “The irony is we were just beginning to look at what opportunities there were in the North Sea again. We hadn’t worked up the projects yet and that work now stops.”

The move threatens hundreds of jobs in the North Sea – and is the latest backlash to the Chancellor’s Budget Day clampdown.

George Osborne raised the tax on North Sea production from 50 to 62 per cent last month to pay for lower fuel duty for Britain’s motorists.

He said it would help fund the penny cut on Budget Day and the scrapping of a fuel tax “escalator”.

The Government is also threatening to cut tax relief on the decommissioning work needed to take rigs apart when oil fields reach the end of their life.

Shell yesterday booked a £660million charge to cover the higher UK tax hit.

But Mr Henry said it would not pass higher costs on at the pump, insisting there was no “linkage”.

The firm put its bumper first quarter results down to the high oil prices and fatter margins in Shell’s refining empire.

Mr Henry insisted it only made a penny from every litre of petrol it sells. And he hinted that pump prices could start to fall, adding: “The oil price is perhaps a little bit higher than the supply-demand position suggests it should be.”

SOURCE ARTICLE

mark williamson

29 Apr 2011

THE chief financial officer of Royal Dutch Shell has warned , the surprise hike in tax on North Sea profits will hit investment in the area, after the company unveiled a 30% leap in profits on the back of surging oil prices.

Simon Henry said the hike, announced by George Osborne’s had already impacted on planning. and it may result in the company investing much less in future than it would have done.

His criticism comes in the wake of similar warnings from other big firms.

The oil giant achieved earnings of $6.3 billion (£3.8bn), net of one-offs and changes in the value of inventories, compared with $4.8bn (£2.8bn) in the same period last year.

This was powered by a 32% annual increase in the average price of the crude oil Shell sold. But Mr Henry claimed Shell’s 800 petrol stations in the UK make only 1p profit on every litre of fuel they sell.

The profit was stated after charging an additional $60 million (£36m) tax on Shell’s North Sea earnings following the 12 percentage point increase in the tax payable on North Sea earnings announced in the Budget. The company said it expects to charge an additional $150m (£90m) tax on its North Sea profits during the rest of this year and a further $900m (£541m) in 2012, including changes in the tax treatment of decommissioning costs.

Mr Henry said the North Sea remains an important area for Shell in terms of production but added: “The big oil fields are likely to go ahead but others look a lot more challenged,” said Mr Henry, who plays a key part in deciding where Shell deploys its vast capital investment budget around the world.

Mr Henry said Shell was likely to approve investment in the giant Clair and Schiehallion oil fields off Shetland later this year. These are operated by BP, which recorded a 4% fall in profits in the first quarter, to $5.4bn (£3.2bn) net of one-offs. The costs of the disastrous Gulf of Mexico oil spill increased by $400m (£240m) in the quarter, when BP also booked a $683m (£410m) charge in respect of the increase in North Sea taxes.

However, Mr Henry said Shell would stop early stage work on two projects. One involved extracting “tight gas” from dense rocks in the southern North Sea. Shell had also been discussing a project involving hard to produce heavy oil with Statoil.

Regarding these, Mr Henry said: “Work stops, basically”.

Mr Henry said investment in smaller fields and “difficult oil” developments would be most at risk of being cut. This might make it difficult to prolong the life of expensive infrastructure.

Mr Henry said the net effects of the reduction could be profound. “It’s pretty clear that the lifetime of operations will be reduced by around one to two years,” he said.

Mr Henry noted that Shell will be making final investment decisions on 10 giant projects across the world this year. These might underpin earnings well into the future.

In the first quarter Shell started shipping liquefied natural gas from the giant Qatargas 4 project in the Middle East and ramped up production from the Jackpine Mine at the Athabasca Oil Sands Project in Canada.

Production fell by 3% annually in the first quarter, to 3.5m barrels oil equivalent daily, following the sale of non-core assets. Yet output from new fields outweighed the decline in production from existing fields.

Upstream earnings increased by 8% annually, to $4.6bn (£2.7bn). Refining and marketing earnings increased by 112%, to $1.6bn (£961,990m).

In a note to clients, analysts at Evolution Securities wrote: “Royal Dutch Shell’s start-up of major upstream projects should see enhanced contributions from this area and enable RDS to continue to outperform its peers.”

Royal Dutch Shell declared a first-quarter dividend of $0.42 per ordinary share, unchanged from the US dollar dividend for the same period in 2010.

SOURCE ARTICLE

By Eduard Gismatullin – Feb 7, 2011 6:35 PM GMT+0000

Royal Dutch Shell Plc’s Chief Executive Officer Peter Voser and five other executives agreed to convert the maximum proportion of their bonus into stock.

Voser got 50 percent of his 2010 bonus, or the equivalent of 1.875 million euros ($2.55 million), converted into 73,457 class-A shares, the company said today in a statement.

Five more executives, including Chief Financial Officer Simon Henry, also converted half of their bonuses into shares. Marvin Odum, president of Shell’s U.S. business, was the only one listed in the statement who converted 25 percent of its bonus into the company shares.

The executive directors have the option of being paid at least 25 percent and not more than 50 percent of their bonuses in shares under the deferred bonus plan, according to the statement.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net –Editor: Will Kennedy

SOURCE ARTICLE

COMMENTS BY “OUTSIDER”

(Please note some pdf links contain multi-page docs and may take a while to download)

The Bloomberg article of September 25th seems to echo a very familiar concept from the Watts/Enron era – promises, promises and more promises. But where is the additional production promised by Brinded repeatedly over the past few years?

A remarkably prescient presentation entitled “overpromise underdelivery” was published on this site a few years ago. We seem to be repeating the process. Shell is shedding staff precisely because it does not have enough projects to justify current staffing levels. In the medium term a lack of development projects can only lead to a decline in production.

One promise (in 2004 or 2005) involved something like a 30% increase in production accompanied by a 30% decrease in costs (unfortunately the words “increase” and “decrease” were apparently transposed).

Yesterday’s highly publicized promise of a 30% increase in production by 2012 to overtake BP should perhaps be taken in the same vein.

In the Shell CFO Simon Henry presentation on 24 Sept 2009, delivered at the Deutsche Bank Oil & Gas Conference, the figures look slightly different from those advertised (see slide 21 of 25.

Unless I am very much mistaken, I see a decline in production for 2009-2010, and a slight increase back to ~2008 levels in 2011-2012, based largely on “key projects”. I see no evidence of any 30% increase for 2011-2012 (which would involve doubling the height of the bar in the bar chart).

NCB analyst Peter Hutton said Mr. Henry’s appointment was a positive move. “Simon developed a very strong rapport with analysts when he was head of investor relations for being straight-talking and no nonsense, a feature which significantly helped restore Shell’s reputation after the reserves issue,” Mr. Hutton said.

Not many people at Royal Dutch Shell survived its reserves misreporting scandal with their reputations intact, but new finance director Simon Henry was one of them

Van der Veer took over in 2004 and restored investor confidence following a reserves restatement that led to regulatory fines, shareholder lawsuits and the ouster of the company’s top three executives, including then-chairman Phil Watts. The scandal prompted Shell to reorganize its corporate and management structure and step up spending on exploration.

The Board of Royal Dutch Shell plc today announced the appointment with effect from 1 May 2009 of Mr. Simon Henry, currently Executive Vice President Finance in Shell International Exploration and Production, as Chief Financial Officer to succeed Mr. Peter Voser who will become the Chief Executive on 1 July 2009.

The Board will propose to the Annual General Meeting on 19 May 2009 that Mr. Henry be appointed as Executive Director with effect from 20 May 2009.

Mr. Henry, a UK citizen, joined Shell in 1982 as an engineer at a UK refinery. After qualifying as a member of the Chartered Institute of Management Accountants in 1989, he has held a number of senior finance positions in Europe, the Middle East and Asia Pacific.

Contacts:

Shell Investor Relations:

Den Haag – Tjerk Huysinga: +31 70 377 3996 / +44 207 934 3856

New York – Harold Hatchett: +1 212 218 3112

Shell Media Relations:

International: +31 70 377 3600

Shell reserves fraud: Videotaped Deposition of Simon Henry, Executive Vice President Finance, Shell Exploration and Production