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Royal Dutch Shell Chief Financial Officer Peter Voser believes oil corporations have started to cut investments in Venezuela

Tuesday 7 November 2006

Washington.- Royal Dutch Shell Chief Financial Officer Peter Voser said “fiscal stability is vital for oil producer countries to attract the huge investment they need to develop and preserve crude oil and gas production.”

Following a presentation at the Woodrow Wilson Center in Washington last week, Voser told El Universal that “international oil companies have started to cut investment and production in Venezuela has started to drop.”

In this way, Shell senior officer explained that “without fiscal stability no one is going to invest” in Venezuela.

He clarified that, in his view, “the most important thing is confidence that a period of changing terms is going to finish” in Venezuela. Voser agreed to elaborate on his statements and answered a number of questions in writing as follows.

Question: Do you believe investment in Venezuela is highly risky?

Answer: Shell trusts high quality trade links with Venezuelan authorities are to remain good and consistent with Shell plans to become a major energy partner in the country.

Q: Does Shell feel comfortable with the terms at Urdaneta oilfield? How would you compare such terms with terms in other oil producing countries?

A: Shell observes the laws anywhere it operates. As a partner of the Venezuelan Petroleum Corporation (an affiliate of Venezuelan state-run oil holding Pdvsa) in a joint venture operating Urdaneta Occidental oilfield, we do believe we will have a long successful partnership. Shell does businesses in other countries, where the company owns a minority stake in joint ventures with state oil firms, and we have recorded great operational and financial results.

Q: How would you describe the business opportunities in Venezuela for foreign oil companies, based on technical and potential factors and despite economic risks?

A: Venezuela is a hydrocarbon-rich country with tremendous opportunities for companies such as Shell, with both technology and expertise to help put take such resources to the market. We are interested in expanding our operations in Venezuela with Venezuelan professionals.

Q: Sean Rooney, CEO of Shell Venezuela, in December 2005 said talks would continue with the Venezuelan Government regarding the launch of a project at the heavy crude oil Orinoco belt. Is the project using technology Shell has developed in Canada and the United States? Have you made any progress in these talks? Is Shell focused on operational agreements only?

A: Discussions about the Orinoco oil belt project are in a preliminary stage. Shell is to bring into this project an outstanding expertise in extra-heavy crude oil production and oil recovery technology we are sure could provide a superior recovery of extra-heavy crude oil resources at the oil belt.

Talks about the Orinoco oil belt and likely joint developments and assessments are expected to timely lead to a project that is highly profitable both for Venezuela and Shell.

Translated by Maryflor Suárez R.
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