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Hemscott.com: Regal Petroleum confirms termination of MoU with Shell UPDATE

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Monday 26 November 2007

LONDON (Thomson Financial) – Regal Petroleum PLC has confirmed the memorandum of understanding it signed with Royal Dutch Shell PLC has been terminated.

Under the MoU, announced on Nov 21, Shell was to acquire 51 pct of Regal’s gas projects in Ukraine for 50 mln usd in cash and invest a further 360 mln usd to develop the fields.

Regal, in a statement released today, said it is considering its options for the development and commercialisation of the Ukrainian assets.

Shell on Friday said it withdrew from the MoU following the sudden exit of Regal’s chief executive Neil Ritson and chairman Francesco Scolaro on Thursday, a day after the MoU was announced.

Regal said Scolaro was leaving his post so he could take care of other business commitments. He will stay on as a non-executive director.

The reason for the departure of Ritson, who took on the CEO role in October last year, was not known. Ritson began his career as a geophysicist with BP PLC before moving through senior technical roles into executive management.

David Greer took on both the CEO and chairman roles with immediate effect. He was previously the project director of the 20 bln usd Russian gas project Sakhalin-2, in which Shell was previously the operator and key shareholder.

Shell was forced to cede control of Sakhalin-2 to state-owned gas giant Gazprom late last year after Russian regulators found environmental breaches during inspections.

Sakhalin-2’s troubles began after Shell admitted the project was 10 bln usd over budget.

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Copyright Thomson Financial News Limited 2007. All rights reserved.

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