SHELL SPIN ON PEARL GTL BUDGET

I just saw that Shell stated the costs for Pearl are estimated to fall between 18-19 billion dollar. And now it comes: this is in line with the planned budget! I do not have the stamina nor inclination to look back in the files or on the Donovan site, but I remember that the plan was around 4 billion. Exxon was bigger for a similar project, but they withdrew in time. Nice spin: 4 fold increase of project cost and then with a straight face say this is in line with the planned budget. Must be invented by the Brinded the Beard.

COMMENT BY JOHN DONOVAN

I do have the stamina and the inclination to expose Shell BS.

This is an extract from an article published by Energy Compass/Energy Intelligence on 22 July 2005.

“…it has broader implications for Shell, which despite its global leadership in LNG is developing an accident-prone reputation when it comes to project execution. Sakhalin is the latest in a series of flagship projects where it has failed to stay within budget. Costs have spiraled on the Athabasca oil sands project in Canada, on Bonga in Nigeria, and most recently on the Pearl GTL project in Qatar — priced at $5 billion at its launch last year, but now already creeping up to around $6 billion. “This type of high-profile project disappointment can do little to help Shell’s case when competing for new opportunities with host governments,” investment bank Citigroup says. “Following 30% cost overruns on Bonga and a 20% increase in cost estimates for Pearl GTL, resource holding governments must be paying attention.”

SOURCE ARTICLE

And from a Wikipedia article…

In 2003 the project cost was estimated to be US$5 billion. However after facing huge cost escalation it was reported to be $18 billion in 2007,^[1] and according to Qatar Petroleum sources final project cost is expected to reach as high as $24 billion.^[7]

Shell was found guilty by the financial regulators of fooling the markets in respect of its claimed proven oil and gas reserves. The fines, class action settlements and associated legal costs of the scandal, amounted to almost $1bn. Now the shysters in the company are apparently at it again, making claims directly at odds with the truth, in blatant breach of Shell’s business principles. Can we expect Shell’s Chief Ethics & Compliance Officer to intervene? Don’t hold your breath.