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Shell Australia’s New Chief Ann Pickard to Lead ‘Major’ Spending on LNG

BLOOMBERG

By James Paton

Nov. 26 (Bloomberg) — Royal Dutch Shell Plc, Europe’s largest oil company, said Ann Pickard is set to take the helm of its Australian business in 2010 as the unit prepares to “go into major spend mode” with liquefied natural gas projects.

Pickard, who oversees Shell’s exploration and production in Africa, is expected to move to Australia toward the end of the first quarter, Jon Chadwick, interim executive vice president for the country, said in an interview in Perth yesterday.

Shell is among LNG companies in Australia seeking to tap Asian demand for cleaner-burning fuels. The nation should become the world’s second-largest exporter of LNG by 2020 behind Qatar, Chadwick estimated. Australia now ranks fifth, according to Resources Minister Martin Ferguson, who describes the nation as an “energy superpower.”

“Customers covet Australian LNG,” said Chadwick. Shell is in discussions with potential Asia-Pacific buyers and “we’re positive about the medium- to long-term outlook for LNG sales.”

At least one out of every 10 dollars of Shell’s global capital investment is allocated to Australia, Chadwick said, declining to provide an estimate for future spending. Shell’s capital investment in oil and gas exploration and production was about $17.3 billion in the first nine months of the year, according to the company’s third-quarter report.

The Hague-based Shell is a partner in the Gorgon LNG venture off northwestern Australia, a development estimated by operator Chevron Corp. to cost A$43 billion ($40 billion).

Floating LNG

Shell has an interest in the North West Shelf project led by Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer. Shell also seeks to pioneer the use of floating LNG technology to develop the Prelude and Concerto fields in the Browse Basin off the Kimberley coast, on top of other gas plans.

Shell may become the first to launch a floating LNG project aimed at developing gas deposits too small and far from the coast to be profitably exploited through onshore plants. A final investment decision on the Prelude project is scheduled for 2011, with first LNG expected in 2016, Shell said in an environmental impact statement released last month.

“We hope it is the first of many,” Chadwick said. “We see other applications of floating LNG not just in Australia and the Asia-Pacific, but around the globe.”

Shell said last month that a quick recovery in energy demand and prices was unlikely and that it would cut 5,000 jobs. Even so, Chadwick said “Australia is a growth area for us.” The headcount in Perth has more than quadrupled to about 260 people in the past four years, he said. “Operating Prelude will have implications we need to staff up for.”

Shell employs about 2,500 people in Australia, according to its Web site.

Pickard, who has been based in Lagos, Nigeria for the past four years as regional executive vice president for Africa, may have the most dangerous executive position in the oil industry, Fortune magazine said in November 2008. Attacks by armed groups have cut more than 25 percent of Nigeria’s oil output over the past three years, according to the United Nations.

Shell doesn’t have a specific start date for the new Australian head, Chadwick said.

To contact the reporter on this story: James Paton in Sydney at [email protected].

Last Updated: November 26, 2009 00:07 EST

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