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The Times: Ex-Shell exploration chief raising $1bn for a comeback

March 24, 2007
Steve Hawkes

Walter van de Vijver, the controversial exploration director forced to quit Royal Dutch Shell three years ago, is raising $1 billion (£510 million) for a return to the oil and gas industry.

The Dutchman is heading a new venture that plans to help international oil companies and state-controlled firms increase production from ageing and dormant fields.

The company, Delta Hydrocarbons, yesterday revealed that it had raised £385 million from 3i, SHV Holdings and Upstream Capital Partners. 3i is running a separate fund-raising for the rest.

The move comes almost three years to the day after Mr van de Vijver stepped down at Shell following one of the biggest scandals to hit a British company.

Shell admitted that it had lied about the amount of proven oil and gas reserves on its books, and the fallout led to investigations by US and UK authorities, a string of civil action lawsuits and the unceremonious departure of chief executive Sir Philip Watts.

At the time, Shell released a series of extraordinary email exchanges charting the growing tension between Sir Philip and Mr van de Vijver before the scandal exploded into the open.

Contacted yesterday at his office near Amsterdam, Mr van de Vijver refused to comment about his past. However, he said: “The industry is undergoing a very significant change. Asset-owners are changing their operational model and focusing on larger projects. Delta offers a solution to national and international oil companies by capturing added value from existing fields.”

Colin Burnett, investment director at 3i, insisted the group had “absolutely no problem” with backing the former exploration director. He added: “Mr van de Vijver is a high-quality individual and he’s assembled a world-class team.”

The Delta Hydrocarbons project comes six months after Mr van de Vijver attempted a similar comeback with UK-based Eastern Energy Partners.

EEP was set up as a fund designed to invest in oil and gas projects around the world, but it never got off the ground.

Delta plans to lend partners technical expertise and financial muscle, and take a share of the incremental revenue in return. The company, initially targeting Latin America, Eastern Europe and Asia, is already close to signing four or five potential deals.

Mr van de Vijver is being joined at Delta by Maarten Scholten, the head of mergers and acquisitions at oil services giant Schlumberger.

One City analyst was sceptical about Mr van de Vijver’s chances of success.

“Mr van de Vijver is a big company man. You have to wonder how he will cope at the other end of the scale.”

The Van de Vijver emails

Van de Vijver raises alarm

“ Recently the SEC issued clarifications which make it apparent that the group guidelines are no longer fully aligned with SEC rules.” Email to Shell committee of managing directors, February 2002

Van de Vijver worries

“ Given the external visibility of our issues (lean organic development portfolio, low reserves replacement, F&D unit costs rising), the market can only be “fooled” if 1: credibility of the company is high; 2: medium and long-term portfolio is real and/or 3: positive trends can be shown on key indicators” Email to managing directors committee, September 2002

Van de Vijver cracks

“ I am becoming sick and tired lying about the extent of our reserves issues and the downward revisions that need to be done because of far too aggressive/optimistic bookings” Email to Sir Philip Watts, November 2003

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources//article1560609.ece?Submitted=true

Comment by John Donovan: Jeroen van der Veer, the current Chief Executive of Royal Dutch Shell Plc and his colleague, Malcolm Brinded, Chief Executive of Shell Exploration & Production, were members of the managing directors committee and received the 2002 warning emails cited in your article. It is therefore astonishing that they remain at the helm of Shell.

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

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