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Strategy to emerge from Shell

The Times: Strategy to emerge from Shell

“The oil company’s annual strategy presentation, to be held today in London, is viewed as a crucial test for Shell’s senior directors. Analysts are looking for evidence that Shell can fill the gap left by the removal from its proven reserves of 4.4 billion barrels of oil and gas.”

By Carl Mortished

September 22, 2004

HOPES that Shell would announce further disposals this morning pushed the Anglo-Dutch company’s stock to a 12-month high of 432p yesterday.

The oil company’s annual strategy presentation, to be held today in London, is viewed as a crucial test for Shell’s senior directors. Analysts are looking for evidence that Shell can fill the gap left by the removal from its proven reserves of 4.4 billion barrels of oil and gas. They are likely to focus on Nigeria and Oman, key areas where the company was forced to discount reserves in January.

Attention will also focus on Shell’s disposal strategy, in particular the sale of Basell, the chemicals joint venture with BASF of Germany. Blackstone Group, the private equity firm, is believed to be scrutinising Basell, a leading manufacturer of bulk chemicals that could generate €6 billion (£4 billion) in proceeds. In addition, Shell is believed to be keen to sell its stake in Intergen, a power generation venture with Bechtel.

Shell will also emphasise the potential of the Athabasca oil sands project in which Shell’s Canadian subsidiary is investing $4 billion during the next five years. The mining project extracts and refines bitumen from oily sands and Shell plans to increase production to 290,000 barrels a day by 2010.

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