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CNNMoney: Shell Executive:Not Worried By Venezuela; Oil Cos ‘Disliked’ In US

February 14, 2008: 02:33 PM EST

WASHINGTON -(Dow Jones)- Venezuela’s decision to suspend oil shipments to Exxon Mobil Corp. (XOM) won’t necessarily affect global supplies because the country could still ship oil elsewhere, an oil company executive said on Thursday.

“I’m not too worried about it,” John Hofmeister, president of Royal Dutch Shell PLC’s (RDSA) U.S. operations, told reporters. “Oil is traded globally, it moves globally, and for oil to be directed one way or another by arbitrary decrees of a nation doesn’t necessarily change the amount of oil available in the total marketplace.”

The Shell executive was wrapping up a 50-state tour, in which he and other executives have been promoting energy policy strategy. The campaign comes as oil prices that are close to record highs and global warming and geopolitical tensions are putting new political pressures on oil companies.

Among the most visible political threats to U.S. oil companies: the U.S. House of Representatives is preparing to vote later this month to replace certain tax breaks for oil companies with tax breaks for renewable-energy investments, responding to calls to expand energy supplies while lessening U.S. dependence on imported oil.

“What that says to an oil executive like me is in a democracy, people can run on a platform of anti-oil company legislation, anti-energy development, for the purpose of spiting the oil companies because we are disliked so intensively,” he said.

High oil prices are among the slew of problems for the U.S. economy, which is also suffering from falling home sales and prices and a related pullback in bank lending. While economists say that the U.S. is on the verge of recession or already in one, the Shell executive said it was too soon to say.

“We don’t know that it’s a definite economic slowdown, a sign of a slowdown at this stage,” he said. “We see that manufacturing margins across the Gulf Coast and on the West Coast while they’re in the lower range of where they were previously they’re not at rock-bottom levels, which says there’s still some demand out there that’s taking the product.”

In the meantime, Hofmeister is pushing to expand energy supplies in the U.S. ” I’ve spent much of the last 10 days in and around Long Island, New York City, and Albany, New York, trying to help promote the idea of the Broadwater LNG facility which would be located nine miles off the coast of Long Island,” he said.

The New York secretary of state is set to decide by April 11 whether the Broadwater Energy Group, a joint venture between Shell Oil Co. and TransCanada Inc. (TRP), may build a liquefied natural gas facility in Long Island Sound without running afoul of the state’s coastal-management policies. Environmental groups and Connecticut’s governor oppose the facility, which would be about 1, 200 feet long and 180 feet wide.

Shell is also pushing for access to conventional sources of energy. Some 100 billion barrels of oil are available in U.S. federal lands and the outer continental shelf, along with a trillion barrels of oil in the oil-shale region of Colorado, Utah, and Wyoming and another trillion barrels in the Canadian oil sands, Hofmeister estimated.

Overseas, Shell is advising the Iraqi oil ministry on a nationwide gas plan and hopes to participate in the development of the country’s oil resources, Hofmeister said.

“We do believe that Iraq offers the world tremendous natural resource development opportunity,” he said. “Shell would very much like to play its part in how that might evolve, but at this point we are not in a production phase, we’re not in a specific contract other than the advising that I talked about.”

-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; [email protected]

  (END) Dow Jones Newswires
  02-14-08 1433ET
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