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Shell warns oil prices could spike on low investment

Reuters

Tue Jun 2, 2009 8:09am EDT

ABU DHABI, June 2 (Reuters) – Low energy investment could lead to a future spike in oil prices, the chief executive of Royal Dutch Shell Plc (RDSa.L) said on Tuesday.

“If the oil prices stay volatile I’m afraid there will be too much slowdown in investment,” Jeroen van der Veer said at an energy conference in Abu Dhabi.

“I think too low capacity means the next price spike is to come.”

Shell has pledged to continue investing despite a decline in crude prices from peaks of almost $150 a barrel last summer. The company plans to invest $31-32 billion in projects this year, compared with $30 billion last year.

The International Energy Agency (IEA) said on Monday it expected a 21 percent fall in 2009 oil and gas investment budgets, which could lead to sharply higher energy prices in the next three to four years. [ID:nSYU006614]

Van der Veer will be replaced as chief executive by Shell’s current Chief Financial Officer Peter Voser in July.

(Reporting by Luke Pachymuthu; writing by Raissa Kasolowsky, Editing by Peter Blackburn)

REUTERS ARTICLE

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