*While Chevron, Exxon, Occidental and other oil majors are eagerly ramping up shale acquisitions and production, Shell has been more reserved in this regard.
*Shale resources may help companies improve on upstream production volumes and reserves, but profitability is questionable, leading to potentially net negative trade-off for investors.
*The ethane plant in Pennsylvania is an example of Shell wisely making use of lower natural gas prices, rather than being on the upstream side, losing money.
Much has been made lately of the deep dive into shale that the likes of oil majors such as Chevron (NYSE:CVX) and Exxon (NYSE:XOM) decided to take in the past few years. A fight over Anadarko (NYSE:APC) between Chevron and Occidental (NYSE:OXY) was perhaps the most emblematic symbol of this industry-changing trend. Analysts and investors quickly jumped to the conclusion that it is imperative for all oil majors to jump in and compete with each other on acquiring and developing shale assets. Exxon and Chevron are currently planning to increase shale production to 1 mb/d each. Shell (NYSE:RDS.A) (NYSE:RDS.B) has been more timid in this regard, and given the profitability profile of the overall shale industry, I am fully satisfied with its position in this regard. Shell’s downstream investments, such as the Pennsylvania ethane plant, meant to take advantage of low shale prices, seems to make far more sense than rushing to produce the low-priced natural gas. Nor does it seem all that wise to rush to produce shale oil, which requires extremely high capital expenses to produce. Some investors may believe that it is more important to maintain reserves and production by diving into the shale patch. I personally think that it is not worth diluting Shell’s overall profitability profile by producing shale oil and gas for the sake of maintaining the company’s overall production numbers.read more
The government of the Netherlands recently stated that gas production from the Groningen field, once biggest in Europe, will be gradually phased out by mid-2022 (eight years earlier than planned) to lower the risk and damages from the earthquakes caused by drilling. Nederlandse Aardolie Maatschappij BV or NAM, a joint venture between Royal Dutch Shell PLC RDS.A and Exxon Mobil Corporation XOM is the operator of the field.
Earlier-than-planned halt of the Groningen gas field resulted from the frequently felt earth tremors with 3.4 magnitude earthquakes hitting the region in January 2018 as well as earlier in 2019, thereby coercing a dip in the extraction levels and a vow by the government to stop production as early as possible.read more
The anger among Groningers was great after two earthquakes last spring. It fueled the fear of new cracks and subsidence, while in some cases the old damage was not even repaired by the syrupy claim settlement and reinforcement operation.
Printed below is an English translation of an article published 10 Sept 2019 by the Dutch FT, Financieele Dagblad. NAM is the Shell/Exxon Joint Venture company responsible for the earthquake blighted Groningen Gas Field and consequential potential bill for untold billions to deal with damaged residences.
Saying goodbye to Groningen gas much faster than expected
The cabinet wants to stop gas extraction in Groningen much faster than planned. Not in 2030, but already in 2022.
Next year gas extraction will fall to 11.8 billion cubic meters, just below the ‘safe’ level of 12 billion cubic meters.
In order to accelerate the gas extraction, nitrogen is added to imported high-calorific gas. Nine large industrial users are no longer allowed to use Groningen gas from October 2022.
Due to the lower gas extraction, the natural gas revenues for the cabinet will fall by €400 million next year. A new gas deal with Shell and ExxonMobil is being prepared.read more
* Gas production at Groningen field to end by 2022
* To end 8 years earlier than initially planned
* Groningen production capped at 11.8 bcm in 2019/2020
* To be kept operational until 2026 at latest in case of exceptional demand (Adds detail)
By Bart H. Meij
er
AMSTERDAM, Sept 10 (Reuters) – The Netherlands will halt production at Groningen, Europe’s largest onshore natural gas field, by 2022, eight years earlier than initially planned, the Dutch government said on Tuesday.read more
Reporting by Ron Bousso, additional reporting by Jennifer Hiller in Houston; Editing by Susan Fenton and Louise Heavens: Sept 6, 2019
LONDON (Reuters) – Major oil companies have approved $50 billion of projects since last year that will not be economically viable if governments implement the Paris Agreement on climate change, think-tank Carbon Tracker said in a report published on Friday.
The analysis found that investment plans by Royal Dutch Shell (RDSa.L), BP (BP.L) and ExxonMobil (XOM.N) among other companies will not be compatible with the 2015 Paris Agreement, which aims to limit global warming to 1.5 degrees Celsius.read more
Shell is in “commercially sensitive” talks to find a solution to continuous flaring at its Mossmorran plant.
The petrochemical giant, which operates Fife Natural Gas Liquids (NGL) Plant alongside Fife Ethylene Plant (FEP), run by ExxonMobil, said it is trying to stem a flow of ethane which needs to be burned off by ground flares at the site.
The $20 billion fund says oil companies including ExxonMobil and Royal Dutch Shell are not doing enough to meet goals set out in the Paris Agreement. But the fund has ruled out a blanket ban on fossil fuel companies.
5 Sept 2019
A Danish pension fund has said it would sell its stake in major oil companies as their business models are incompatible with the goals set out in the Paris climate agreement.
MP Pension, a $20 billion (€18 billion) pension for Danish M.A’s, M.Sc.’s and Ph.D’s who are employed in public sector universities and upper secondary schools, said it would dump its stakes in 10 of the world’s largest oil companies, including ExxonMobil, BP, Chevron, PetroChina, Rosneft and Royal Dutch Shell.read more
Exxon, Shell cannot revive $1.8 billion Nigerian arbitration award – U.S. judge
5 Sept 2019
By Jonathan Stempel
NEWYORK (Reuters) – A U.S. judge on Wednesday rejected Exxon Mobil Corp’s <XOM.N> and Royal Dutch Shell Plc’s <RDSa.L> effort to revive a $1.8 billion arbitration award against Nigeria’s state-run oil company, which stemmed from a dispute over a 1993 contract to extract oil near the African country’s coastline.
U.S. District Judge William Pauley in Manhattan cited public policy and due process considerations in deciding not to enforce the October 2011 award against Nigerian National Petroleum Corp (NNPC), which was subsequently set aside by courts in Nigeria.read more
Shell had it worst. Its B shares in London have plunged more than 12% last month, a decline not seen since the 2008 financial crisis, which has knocked almost £26bn ($32bn) off its market value. That’s put chief executive officer Ben van Beurden’s dream of being No 1 in the industry by every measure even further out of reach.read more
AMSTERDAM, Aug 27 (Reuters) – The Dutch government will end production at the vast Groningen natural gas field sooner than previously announced, Dutch Economy Minister Eric Wiebes said on Tuesday.
“I expect the Groningen field to no longer be necessary very soon”, Wiebes said in an interview on Dutch public radio.
“Things are moving very fast, a lot faster than anyone would have predicted some time ago.”
Output at Europe’s largest onshore gas field, operated by Royal Dutch Shell Plc and Exxon Mobil Corp, has been slashed in recent years as tremors blamed on drilling have damaged buildings and sparked unrest in the region.read more
Climate-Action 100+, a group of money managers overseeing more than $33 trillion, works to influence the largest corporate emitters of greenhouse gases.So far the organization has persuaded Royal Dutch Shell Plc to set short-term climate targets and publish a report on its lobbying of governments.
Bloomberg: Big Money Starts to Dump Stocks That Pose Climate Risks
After years of meetings and shareholder resolutions, some funds are starting to simply divest from coal and oil stocks.
By Kelly Gilblom: 7 August 2019, 05:01 BST
Earlier this year, one of Meryam Omi’s deputies at Legal & General Investment Management sat down with board members and managers from Exxon Mobil Corp. to discuss how the oil giant could address climate change. LGIM, which manages about $1.3 trillion, is one of Exxon’s top 20 shareholders.
The Exxon delegation listened, but it didn’t accept the suggestions, says Omi, LGIM’s head of sustainability and responsible investment strategy. Around the same time, Exxon persuaded the U.S. Securities and Exchange Commission to block a shareholder resolution that pushed the oil giant to do more to address climate risks.read more
Ciara Newton had her dream job at a Shell refinery. But she was fired after enduring months of harassment, including sexist comments from supervisors and a lewd sticker.
Zahra Hirji: BuzzFeed News Reporter: Reporting From Oakland, California
Last updated on August 6, 2019, at 1:14 p.m. ET
Posted on August 6, 2019, at 8:30 a.m. ET
OAKLAND, California — She walked toward the witness stand at eight months pregnant, her slow steps echoing in the cavernous federal courtroom.
Two years earlier, she had been fired from her dream job at a Shell refinery after enduring months of harassment — sexist comments from two male supervisors, reprimands for documenting her coworkers’ mistakes, a lewd sticker on her desk. She got the termination notice just days before the end of her job’s nine-month probation period. The fallout was devastating. She lost the loan needed to buy her recently widowed mother’s house, spiraled into depression and anxiety, and ended up working at an airline two hours from her home for half the pay.read more
LONDON (Reuters) – Royal Dutch Shell’s second quarter profits slumped to a 30-month low due to lower oil and natural gas prices and refining margins, falling far short of forecasts.
The Anglo-Dutch company reported on Thursday a rise in cash generation – a sign of improving operations – but the drop in profit dents a steady recovery since the end of 2016.
Shell, the world’s second-largest publicly-traded energy company, joins rivals Total and Norway’s Equinor in reporting weak results for the quarter.read more
The criticism of striking students by the trillion-dollar Organization of the Petroleum Exporting Countries (Opec) highlights the growing reputational concerns of oil companies as public protests intensify along with extreme weather. Mohammed Barkindo, the secretary general of Opec, said there was a growing mass mobilisation of world opinion against oil, which was “beginning to … dictate policies and corporate decisions, including investment in the industry”. READ MOREread more
The government decided to cut production after residents blamed hydraulic fracturing for damage to buildings in the area. It was decided earlier to schedule the field’s closing for 2030 while progressively reducing production, after a 3.4 magnitude earthquake occurred near the field last year. The field is operated by Nam, a joint venture established by oil supermajors Royal Dutch Shell and ExxonMobil.
July 5, 2019
Dutch advisory body Council of State’s Administrative Jurisdiction Division (Adj) Wednesday requested from the government further explanation for the closing of a major onshore field, Kallanish Energy learns.
The Groningen field is the largest in Europe. The government decided to cut production after residents blamed hydraulic fracturing for damage to buildings in the area.
It was decided earlier to schedule the field’s closing for 2030 while progressively reducing production, after a 3.4 magnitude earthquake occurred near the field last year.read more
Fossil fuel industry giants such as ExxonMobil and Royal Dutch Shell are maintaining an outsized presence at global climate discussions, working to undermine scientific consensus and slow policy progress, according to findings released Wednesday…
Delegates from major oil companies have influenced international accords for decades.
By Luke McGrath: 24 June 2019, 10:00 BST
Fossil fuel industry giants such as ExxonMobil and Royal Dutch Shell are maintaining an outsized presence at global climate discussions, working to undermine scientific consensus and slow policy progress, according to findings released Wednesday by an environmental monitoring organization.
The Climate Investigations Center (CIC) report claims that fossil fuel trade associations have sent more than 6,400 delegates to climate talks since 1995, including delegates from Shell, BP and ExxonMobil.read more
singapore love: Rumor on the street is the Shell Vito project is over a year behind schedule, AND Shell plans to double down and award Whale to the same contractors in the coming weeks.
Must be some serious love going on between the Singaporeans and Shell decision makers....
Bonus Group: To uscitizen,
BRAZIL:
'PS - Shell is investing 2 billion a year into Brazil and already paying off'. Assuming $2Bn (you did not quote currency), that would just about cover Shell's share of the costs of replicants, operating expenses and of course managers' BONUSES!
$2Bn would represent approximately 10% of Shell's income in 2018.
https://reports.shell.com/annual-report/2018/consolidated-financial-statements/statement-of-cash-flows.php
FPSO unit cost: our initial case ($91bn total capex) assumed a cost of $2.5 billion for each of 13 FPSO units. However, our research shows a wide range of possibilities for this cost depending on the vessel configuration; plus the fact that Brazilian shipyards should get better at building them so the cost could reduce over time. Also the project might choose to lease rather than buy the FPSOs outright, which could improve economics for the consortium depending on the lease terms.
http://openoil.net/wp/wp-content/uploads/2016/12/OO_br_Libra_narrative_1.0_161104.pdf
Bonus Group: To uscitizen,
BG GROUP ASSETS SOLD BY SHELL SUBSEQUENT TO TAKEOVER:
Petrobras and Total announced that they have finalized a decisive milestone in the realization of their Strategic Alliance, signed in March 2017, with the completion of the following transactions: Transfer from Petrobras to Total of 22.5% of the rights of the Iara area, which comprises the Sururu, Berbigão and Oeste de Atapu fields in Block BM-S-11A in the Santos Basin pre-salt, operated by Petrobras (42.5%) alongside Shell (25%) and Petrogal (10%). The consideration for the above transactions amounts to US$1.95 billion, including closing adjustments. This amount does not include US$ 400 million that can be triggered by Petrobras to carry a part of its investment share in the Iara development fields and contingent payments.
http://www.petrobras.com.br/en/news/petrobras-and-total-complete-the-transfer-of-rights-in-the-lapa-and-iara-concessions-as-part-of-their-strategic-alliance.htm
Royal Dutch Shell is nearing the sale of a large part of its North Sea oil and gas assets to private equity-backed Chrysaor for $3 billion, banking sources said, marking a milestone in its drive to reduce debt after buying BG Group.
https://www.reuters.com/article/us-shell-m-a-northsea/shell-set-to-sell-3-billion-north-sea-assets-to-chrysaor-idUSKBN15B14M
Including this week’s US$750 million sale of an offshore shallow water gas field in Thailand.
https://www.jwnenergy.com/article/2018/1/shell-has-sold-us27-billion-assets-acquiring-bg-group-charts/
The deal covers Shell’s interests in the fields Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine, and a 10% stake in Schiehallion. Shell also announced on Tuesday that it had sold its stake in a Thai gas field for $900m to a subsidiary of the Kuwait Foreign Petroleum Exploration Company.
https://www.theguardian.com/business/2017/jan/31/shell-sells-north-sea-oil-gas-fields-chrysaor-linda-cook
TOTAL: $5.7Bn = 21% of $27Bn
uscitizen: Bonus group, Contradict myself - lol. Poor guy - like I said do your own research - tell us what you find, you will look like the irrational uneducated poster you are. PS - Shell is investing 2 billion a year into Brazil and already paying off. Do you ever look anything up?
Bonus Group: To US Citizen. Thank you for your post of September 9th 2019 20:12. Congratulations on also being an avid reader of this blog. You are correct in my post of June 26th 2019 23:05 I did say that '..Shell had a ‘fire sale’ of a plethora of BG ‘dross’ assets in order to raise $30Bn to disguise the amount by which they had overpaid for BG Group.' More correctly, Shell had a ‘fire sale’ including a plethora of BG ‘dross’ assets in order to raise $30Bn to disguise the amount by which they had overpaid for BG Group. This does not detract from the fact that Shell did have a 'fire sale' in order to raise $30Bn. By my estimation Shell over paid for BG Group by about 30%. The Christmas boxes were very large, but the presents were very small. You contradict yourself when you say that you will not do my homework for me, but then tell me that the split of the $30Bn assets sold was 80:20 Shell:BG. Is that correct? If so, thank you that just goes to show how worthless those BG assets were, but then that is what you can expect from a Cappuccino and Belgian chocolate lifestyle company. Any comments about what the Brazil Asset are up to these days?
uscitizen: To Bonus Group - the large percentage of assets sold by Shell were non BG assets. I will not do your homework for you, but the split is 80/20. A great example of why you do not take what this sites protagonists post as good information. But go ahead, say I am wrong and also posting garbage, do your research and tell me the number of BG asset sales vs the 30 billion Shell raised thru asset sales.
John Donovan: MESSAGE FROM JOHN FOR THE ATTENTION OF BOGUS GROUP. I have received the information you kindly sent and have replied by encrypted email.
Bill Campbell Prelude Comment: I might write in more detail but I find it rather ironic that it was this website that was telling the world 6 or so years ago that this installation did not have risk levels as low as claimed and one of the principal risk drivers was the compact nature of a hazardous substances plant with not enough space to swing a cat in. Unless you are not aware I wrote to Shell Australia at the time giving them data from 8 existing or planned onshore LNG plants which varied from 80 to 100 hectares or on average 20 to 22 times the footprint of Prelude, could they tell me as a stakeholder with shares in the Company how they arrived at their ridiculously low number but can guess I assume that a reasonable explanatory reply was not forthcoming, as sure as eggs are eggs if this plant is currently having problems or if it has problems or major accident events in future it will be due to the force fitting a complex plant, with risk levels much above which they have published, on a postage stamp of a footprint.
God willing they will never live to regret their fraudulent overly optimistic claims, risk is based on reality not wishful thinking.
Bill
Thanks. Problem is that it's behind a paywall and despite it being a great publication for the oil industry, none of us retired folk wants to invest in a subscription.
FURTHER REPLY FROM JOHN
I have received the further Prelude information you have kindly provided and have replied by encripted email.
Bonus Group: Further to Bogus Group's post yesterday. I am absolutely appalled that a Senior Executive of Royal Dutch Shell plc should spout so much nonsense concerning the Prelude installation. The statement is redolent of Malcolm Brinded and his 'Touch F*ck All' policy, which led to the deaths of Keith Moncrieff and Sean McCue on Brent Bravo on 11th September 2003. What is boring is the continuous misleading spin and blather from the top of this company and their lackadaisical approach to safety. 'Chronic Unease' is a well known expression in the Oil and Gas Industry, and that state of mind is far from boring or routine. In fact nothing is either boring or routine in Oil and Gas operations. Rob Jager moved last year to the post of VP Prelude after spending thirteen years as Country Chair and VP for Shell New Zealand/Shell Taranaki, after Shell announced the sale of its New Zealand interests in March 2018. Jager clearly previously has spent too much time being 'laid back' in the fantasy land of Lord of the Rings, marvelling at New Zealand's scenery and wondering who will be entertaining him for his next luxury seafood dinner accompanied by a glass of chilled expensive New Zealand Sauvignon Blanc.
Bogus Group: PLEASE SEE REPLY FROM JOHN WHICH FOLLOWS THE COMMENT FROM BOGUS GROUP
More on Prelude article in Upstream.
I’m stunned by what can only be described as idiotic statements. Nothing like the utopia of self-aggrandisement without verification. What is Jagers’ level of technical and operational capabilities? I recall similar rhetoric from BG Group charlatans, with the “best in class” mentality and use of the most overstated expression ever to be used outside the education sector, all aimed at pleasing their taskmasters.
Ramp-up of Prelude and what Jager hopes will be decades of “uneventful” and “boring” operation.
“This will be a state where little or nothing happens. We have few if any alarms, no surprises and where things are running like clock work and we are effectively in autopilot,” he said.
“We will know when we have succeeded in this ambition because Prelude will be recognised as the most boring asset in Shell global portfolio our people will refer to it as the safest and most desirable place to work, and when the rest of the industry is knocking on our door to find out how we have achieved such a best in class outcome, especially for a facility as complex and unique as Prelude.”
REPLY FROM JOHN
Hello, I would be grateful if you could send me a copy of the article via [email protected] using an anonymous email address. I would pass it on to retired Shell EP experts for their assessment.
This is not a Shell website. Click on Disclaimer link at top of page for more information.
OPL 245 CORRUPTION SCANDAL: LATEST NEWS
$1.3bn Malabu Oil Scandal: Italy Protests Swiss Delay in Releasing Evidence against Shell, Eni 22 Jun 2019 04:10 This Day Chika Amanze-Nwachuku with agency report
Italian prosecutors have expressed dissatisfaction about lengthy delays in obtaining evidence they have requested from Switzerland in the criminal charges against Royal Dutch Shell and Italy’s Eni with regard to …
FG names Shell, Eni executives in $1bn bribery case – The Punch 08 May 2019 11:43 Google ’Femi Asu with agency report
Royal Dutch Shell Plc and Eni SpA face additional corruption allegations over a Nigerian oil deal, after the Federal Government said in a London lawsuit that it believed a handful of executives, including Chief Executive …
FG files fresh charges against Shell executives, JPMorgan over Malabu Oil scandal 08 May 2019 10:01 Herald Sequel to the lawsuit filed last year against Royal Dutch Shell Plc, Eni and JP Morgan for being involved in a $1bn oil block bribery case, the Federal Government has submitted new case documents that indict their top executives.
FG said in the court files …
FG names Shell, Eni executives in $1bn bribery case 08 May 2019 08:09 Punch Newspapers ’Femi Asu with agency report
Royal Dutch Shell Plc and Eni SpA face additional corruption allegations over a Nigerian oil deal, after the Federal Government said in a London lawsuit that it believed a handful of executives, including Chief Executive …
Dutch Prosecutors to Arraign Shell over $1.3 billion Acquisition of OPL 245 02 Mar 2019 10:19 Biz Watch Nigeria Dutch Prosecutors to Arraign Shell over $1.3 billion Acquisition of OPL 245
Dutch prosecutors are preparing criminal charges against Royal Dutch Shell over its $1.3 billion acquisition of Nigerian offshore oilfield OPL 245 in 2011.
Shell said in a …
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Bart H. Meijer: SEPTEMBER 10, 2019
Reporting by Ron Bousso, additional reporting by Jennifer Hiller in Houston; Editing by Susan Fenton and Louise Heavens: Sept 6, 2019
by 
The $20 billion fund says oil companies including ExxonMobil and Royal Dutch Shell are not doing enough to meet goals set out in the Paris Agreement. But the fund has ruled out a blanket ban on fossil fuel companies.
Exxon, Shell cannot revive $1.8 billion Nigerian arbitration award – U.S. judge
AMSTERDAM, Aug 27 (Reuters) – The Dutch government will end production at the vast Groningen natural gas field sooner than previously announced, Dutch Economy Minister Eric Wiebes said on Tuesday.
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Delegates from major oil companies have influenced international accords for decades.
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