Daily Mail (UK): Shell unveils blueprint to boost output
Brian O’Connor,
23 June 2005
SHELL plans to boost oil and gas output by a third in 10 years and to become a major trader in carbon-dioxide emissions.
But its ‘one board, one voice’ plan may need more work. It warned in London that global oil supplies are tight, implying that any setback could drive prices even higher. However, Shell Canada chief Clive Mather said in New York that a price fall was ‘almost inevitable’.
Group chief executive Jeroen van der Veer pointed out that stocks are at ‘pretty normal’ levels.
He said Shell’s long-term plans are still based on a price ‘grid’ around $25 a barrel. Mather said Shell Canada is using $35 for new projects. Last night US crude fell 95 cents to $58.09.
The US Energy Information Administration last night predicted prices would stay higher than $50 on average for the next 18 months.
Van der Veer’s targets for the next 10 years include:
* up to 10 giant ‘elephant projects’ worth billions of dollars – Shell has three;
*to lift annual output – now between 3.5bn and 3.8bn barrels a day – to 5bn;
* to hire 10 chief scientists in fields such as geology; and
* to hire a ‘Mr or Mrs CO2’ to tackle ‘a huge problem for the world’.
Van der Veer said ‘the lion’s share’ of energy needs in 2015 will still come from oil and gas. Shell’s Canadian tar sands will treble output to 500,000 barrels a day.
Renewable energy is ‘simply too expensive’ until technology cuts costs. But cutting CO2 emissions would make oil and gas use cleaner.
Van der Veer said Shell must ‘never again’ go through what it did in last year’s reserves scandal. ‘We have changed the culture of the company. It used to be bottom up, now we have more direction from the top’.
He called the unification of the group into Royal Dutch Shell a ‘historic moment’. Shareholders vote on Tuesday. This will give more room ‘to issue equity and debt’.
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