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Shell chief defiantly upbeat about future of the oil sector

THE SUNDAY TELEGRAPH: Shell chief defiantly upbeat about future of the oil sector

By Sylvia Pfeifer (Filed: 12/06/2005)

Jeroen van der Veer, the chief executive of Royal Dutch/Shell, the oil giant, will launch a robust defence of the future prospects of the industry tomorrow, arguing that ‘this is most definitely not a sunset industry’.

In a speech to be delivered in Asia, van der Veer will argue that the business prospects for the industry are good and that “energy will remain one of the most important and dynamic industrial sectors”.

“The world will need much more energy, and most will come from fossil fuels for the foreseeable future. Demand is likely to increase considerably more over the first three decades of this century than it did over the previous 30 years,” van der Veer will say.

He will sum up the state of the oil and gas industry today as “prospects good, challenges great”.

According to van der Veer, a number of developments will require the industry to change the way it operates. One is that Asian countries are now driving the growth in demand for energy, accounting for nearly half last year’s very rapid rise in oil consumption. He says Asian countries could consume a quarter of the world’s oil supply by 2030.

Van der Veer will argue that the major challenge facing the industry is to make sure that it can secure energy supplies in order to meet the world’s increasing needs. A crucial part of this will be to make the most of maturing reserves, develop new resources and expand gas delivery chains.

Shell was last year forced to cut its proven oil and gas reserves. The crisis prompted the departure of former chairman Sir Philip Watts and led to the historic decision to merge its two operating companies.

Meanwhile, the Department of Trade and Industry will this week launch an initiative as part of its aim to maximise the recovery of oil and gas reserves from the North Sea.

Under the scheme, devised in consultation with the industry, the DTI will have the power to demand that companies increase their investment in fields or lose their licences.

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