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Shell May Cut More Jobs says Voser

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Shell May Cut More Jobs as Energy Demand Recovery Remains Muted

January 29, 2010, 07:22 AM EST

By Fred Pals and Francine Lacqua

Jan. 29 (Bloomberg) — Royal Dutch Shell Plc, Europe’s second-largest oil company, may need to cut more jobs this year to control operating costs as a recovery in energy demand waits until the second half.

“It’s normal in any business that you have to go further and you have to operate your operating expenditure in a very tough way,” Chief Executive Officer Peter Voser said in a Bloomberg Television interview in Davos, Switzerland. “As part of that, it may also mean that some more people have to go

Voser took over from Jeroen van der Veer in July and complained that Shell’s operations had become “too complex.” Voser merged units and cut about 5,000 jobs, including senior management posts. About 15 percent of Shell’s refining capacity was placed under review, while the company is also scaling back expansion in production from Canadian tar sands.

Swiss-born Voser inherited the industry’s biggest spending program in 2009, amounting to $32 billion, in the middle of a global economic crisis that forced oil companies to delay some projects and cancel others. Shell cut operating costs by about $1 billion in the first nine months of last year.

“I’m a little bit more cautious on the recovery,” Voser said. “We still see some effects from the stimulus package into 2010, some of the consumption-driven demand is not coming back, so I’m rather more pessimistic for the first half of the year than I am maybe for the whole year or the second half.”

Voser’s Priority

Voser’s priority is to revive production growth with new projects in Qatar and Malaysia after output fell below 3 million barrels of oil equivalent a day. Shell has spent billions of dollars on unconventional oil projects such as the gas-to- liquids plant in Qatar and is also venturing into Iraq with exploration and production deals.

Shell is looking at Venezuela, Voser said. “We are studying the bids which are now coming into the wider domain in Venezuela, and we will decide if we bid or not in the future,” he said.

Venezuela’s oil ministry is taking offers from companies that paid $2 million each to bid for the minority stakes in three new projects that will pump and refine oil from the Carabobo areas of the Orinoco Belt. The winners will get a 40 percent stake in the projects.

–Editors: Will Kennedy, John Buckley.

To contact the reporters on this story: Fred Pals in Amsterdam at +31-20-589-8563 or [email protected]

To contact the editor responsible for this story: Guy Collins at +44-20-7330-7521 or [email protected]

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