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Shell’s New Strategy: Spend, Sell Assets

The New York Times: Shell’s New Strategy: Spend, Sell Assets

“Years of under-investment and scatter-gun exploration of smaller-than-needed prospects has left Shell failing to find more oil and gas than it pumps out of the ground each year.”

By THE ASSOCIATED PRESS

Posted 23 Sept 04

LONDON (AP) — Royal Dutch/Shell Group on Wednesday said it will spend $45 billion and sell off up to $12 billion worth of assets to reinvigorate its underperforming oil and natural gas business.

From 2004 to 2006, the Anglo-Dutch energy giant will spend $15 billion a year on its portfolio of assets. Of that, executives said at a strategy presentation here, $11.5 billion will be spent on the group’s upstream assets — exploration and production, and gas and power. read more

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Troubled Shell puts faith in high oil price for recovery

The Times: Troubled Shell puts faith in high oil price for recovery

“The focus on growth drew scorn from analysts, who said Shell should focus on generating cash. “It was a fairly inept performance,” one said.”

By Carl Mortished, International Business Editor

September 23, 2004

SHELL, the beleaguered oil giant, is pinning its hopes for recovery on long-term high oil prices. In its first strategy presentation since the reserves scandal, the Anglo-Dutch company set out an aggressive plan to rebuild its reserves with more investment and acquisitions.

Jeroen van der Veer, chairman of Royal Dutch/Shell, promised to spend $45 billion (£25 billion) over three years and said that Shell would plan the cashflow on an oil price assumption of $25 per barrel, up from last year’s benchmark of $20. “Higher energy prices are likely to be here for some time. That gives us opportunities,” he said. Oil prices have surged to more than $49 a barrel this year on supply concerns but Shell is the first big oil company to shift its long-term planning scenario to a higher price plane. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Shell spending plans dash buy-back hopes

Financial Times: Shell spending plans dash buy-back hopes

“Royal Dutch/Shell again disappointed the markets… …it dashed hopes for a share buy-back, announcing that it would spend $45bn (€37bn) over the next three years as it seeks to repair the damage caused by its reserves scandal.”

By James Boxell in London

Posted 23 Sept 04

Royal Dutch/Shell again disappointed the markets on Tuesday as it dashed hopes for a share buy-back, announcing that it would spend $45bn (€37bn) over the next three years as it seeks to repair the damage caused by its reserves scandal.

The Anglo-Dutch oil group, which this year was forced to cut its levels of proved reserves by more than 20 per cent, told its annual strategy meeting that most of the cash would be spent on oil exploration and production. read more

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Slick display glosses over difficulties

Financial Times: Slick display glosses over difficulties

“While most observers agreed that its presentation was slick and thoughtfully put together, the lack of underlying substance was also apparent to some.”: “To shift attention away from the reserves debacle, Mr Brinded pointed out that Shell’s underlying resources were still some 60bn barrels of oil, the same as before the reserves readjustment. However, one analyst said Mr Brinded’s highlighting of the 60bn barrel figure was misleading…”

By James Boxell

23 Sept 04

According to analysts, Shell missed a golden opportunity to re-establish its credentials with the market.

While most observers agreed that its presentation was slick and thoughtfully put together, the lack of underlying substance was also apparent to some.

As Peter Nicol, analyst at ABM Amro, puts it: “The challenge is what they do this decade, but all the big projects they mentioned on Wednesday point to the next decade. The presentation really underlines the challenge they face in their upstream business over the next few years.” read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Shell’s revival plan falls flat in the City

The Guardian: Shell’s revival plan falls flat in the City

Oil group to invest $45bn with no guarantee that production will increase: “A crucial strategy briefing to reignite City confidence in Shell fell flat yesterday with investors “underwhelmed” by forecasts of flat production growth and no major commitment to share buybacks.”

Terry Macalister

Thursday September 23, 2004

A crucial strategy briefing to reignite City confidence in Shell fell flat yesterday with investors “underwhelmed” by forecasts of flat production growth and no major commitment to share buybacks.

Shares in the troubled oil group fell 3% to 418p as it promised to invest $45bn (£25.1bn) by 2006 but admitted this might not be enough to increase production from current levels – even by 2009.

The company – still reeling from a 20% downgrade in proven reserves in January – also announced plans to sell up to $12bn worth of under-performing assets by 2006. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Companies show interest in Shell’s Bakersfield refinery

KESQNewsChannel3: Companies show interest in Shell’s Bakersfield refinery

23 Sept 04

LOS ANGELES Shell Oil says it has received interest from more than 70 companies to buy its Bakersfield refinery that produces two percent of California’s gasoline.

Shell had agreed to delay the planned closure of the refinery to allow for more time to find a buyer. Shell says more than 20 companies have signed confidentiality agreements, allowing them to enter the sales process.

The company says no new companies will be allowed to enter the sales process.

If no agreement can be reached with a company, Shell said the refinery closure plan will continue. Shell President Lynn Laverty Elsenhans has agreed to keep the refinery running through March 31st _ six months later than the October first planned shutdown date. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Shell fails to impress City with growth plan

The Scotsman: Shell fails to impress City with growth plan

“SHELL yesterday said it would plough $45 billion (£25bn) into the business between 2004 and 2006 to drive organic growth in the wake of the oil reserves overstatement fiasco that prompted big regulatory fines and damaged the group’s City credibility.”

MARTIN FLANAGAN

CITY EDITOR

Thu 23 Sep 2004

SHELL yesterday said it would plough $45 billion (£25bn) into the business between 2004 and 2006 to drive organic growth in the wake of the oil reserves overstatement fiasco that prompted big regulatory fines and damaged the group’s City credibility.

The company also said it planned $10bn (£5.6bn) and $12bn (£6.1bn) of disposals over the period to bolster its balance sheet and give it headroom for possible share buybacks, although the market was disappointed no firmer commitment was made to returning money to shareholders. The shares fell 14.25p, or 3.3 per cent, to 418p. read more

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Wall Street rattled by Fed as Shell fails to please City

The Scotsman: Wall Street rattled by Fed as Shell fails to please City

More questions than answers: “Most investors believe the overstatement of reserves fiasco shows Shell was seriously flawed under the current management structure, and want a single unified board instead.”

MARTIN FLANAGAN
CITY EDITOR

23 Sept 04

THE market’s 3 per cent markdown of Shell’s shares yesterday had little to do with the strategy unveiled in London by the group’s top bods.

It was almost classic textbook stuff in the oil industry at present. Fancy oil prices are making acquisitions difficult to pull off. So instead beef up the capex budget and pour money into organic growth – in Shell’s case $45 billion between 2002 and 2004.

Meanwhile, retire from lots of countries to focus on fewer, more streamlined opportunities – while flogging off vast swathes of the business it does not want anymore. In Shell’s case this runs to $10-$12bn – which is a lot of unwanted fields. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

FSA denies Watts’ complaint

Daily Telegraph: FSA denies Watts’ complaint read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Shell meaningless management-speak phrases

Daily Telegraph: City comment: For a company that has so long considered itself top of the heap in the oil game, the humiliation inside can only be guessed at. Even Jeroen van der Veer, Shell’s top executive, had to admit the business was in crisis…”: “Shell’s slide show was ghastly. Meaningless management-speak phrases such as “fix and reset the business” and “growth in markets of choice” might have been designed to reassure, but instead showed that Shell’s problems extend beyond its reserves issue.”

Edited by Neil Collins

(Filed: 23/09/2004)

We’ll be running to standstill until 2009, says Shell

Shell unveiled its three-year plan in the appropriately-named Plaisterers’ Hall yesterday. Under a coat of arms with the motto ‘let brotherly love continue’, the shell-shocked senior executives did their best to cover up the cracks with smooth-finish plaster.

Alas, their efforts managed nothing of the kind. Desperate not to make promises that might not be met, the best that they could do was to project maintained production until 2009, by which time some of the results of spending $45billion on holes in the ground might be flowing through. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

We’ll be running to stand still until 2009, says Shell

Daily Telegraph: We’ll be running to stand still until 2009, says Shell

“…Mr Van der Veer was dismissive of suggestions it might merge with French giant Total. He said: “The fact that [that story] can get legs shows that our reputation is not where we want it to be.”: “Shell was embarrassed about selling a field in North India to oil minnow Cairn Energy for a few million dollars which later yielded hundreds of millions of barrels of oil, he said.”

By Christopher Hope, Business Correspondent (Filed: 23/09/2004)

Shell pledged yesterday to spend more cash on finding oil and gas over the next three years as the world’s third largest oil company admitted that its production was likely to be flat between now and 2009.

Shell also said it would sell off $10 billion to $12 billion of non-core assets as part of an “urgent need” to restore its position after “losing” 4.4 billion barrels of proven oil and gas earlier this year. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

A Strategy for Shell?

The New York Times: MARKET PLACE: A Strategy for Shell?

“…it has paid $150 million in fines after investigations by United States and British regulators. It still faces about a dozen lawsuits and may suffer more negative publicity as one of the executives, Sir Philip Watts, the former chairman, mounts his defense.”

By HEATHER TIMMONS

LONDON

September 23, 2004

THE Royal Dutch/Shell Group said yesterday that it would sell as much as $12 billion in assets, spend $45 billion on new projects and consider some acquisitions as it tries to bolster oil and gas production.

In Shell’s first long-term strategy presentation since it unnerved the markets in January by reducing estimates of oil and gas reserves 20 percent, the company’s chairman, Jeroen van der Veer, promised more profitable businesses and said Shell would “raise the performance bar.” read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Shell Pegs Budget For Exploration To Higher

THE WALL STREET JOURNAL: Shell Pegs Budget For Exploration To Higher

“Mr. van der Veer declined to discuss details of an internal review of the company’s corporate structure. Shell is studying whether to change its dual-board structure, which critics have blamed for obscuring accountability in Shell’s reserves scandal. The company expects to unveil options in November.”

By CHIP CUMMINS

Staff Reporter of THE WALL STREET JOURNAL

September 23, 2004; Page A3

LONDON — Moving to persuade investors it can turn around its exploration-and-production unit, Royal Dutch/Shell Group said it is counting on higher oil prices to allow it to spend more on finding oil and natural gas. But Shell didn’t sharply boost the budget, raising questions about its ability to quickly add petroleum reserves.

Shell executives, betting that oil prices will remain strong, said they plan about $45 billion, or roughly €37 billion, in capital expenditures over the next three years. The $15 billion in annual spending is up from $14.3 billion last year. About $11.5 billion a year of that is earmarked for Shell’s exploration-and-production businesses, or so-called upstream activities, up from $10.7 billion last year. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Shell unveils $15bn recovery plan

The Guardian: Shell unveils $15bn recovery plan

“The reserves scandal forced Shell’s chairman, Philip Watts, to resign, along with Walter van de Vijver, its oil and gas chief and its chief financial officer, Judy Boynton. The company was fined by the financial services authority in the UK and the securities and exchange commission (SEC) in the US.”

Mark Tran

Posted 23 Sept 2004

The Anglo-Dutch oil giant Shell today sought to draw a line under its reserves scandal by announcing plans to spend $15bn (£8.4bn) a year to replenish reserves and develop production in its oil and gas business.

The world’s third-largest oil company also said it would sell $10-$12bn of non-core businesses over three years and would look at “focused acquisitions” to create value.

“We are focused on improving our competitive position, strong cash generation and total shareholder returns,” Jeroen van der Veer, the Shell chairman, said in the group’s strategy statement. “Replacing our reserves is a priority to support future growth.” read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Royal Dutch/Shell is trying to regain its reputation

Financial Times: Lex: “Royal Dutch/Shell is trying to regain its reputation.”

“Thanks to high oil prices Shell’s share price has more than regained the ground lost in this year’s reserves scandal. But, while a rising tide lifts all boats, there is little in Shell’s strategy to significantly narrow the gap with rival BP”

Posted 23 Sept 04

At least Shell is facing up to reality. After years of sub-standard performance on reserve replacement, capital expenditure is set to rise. A focus on larger prospects and a bias towards gas, where returns are high and Shell has a leadership position, appear sensible. It is, however, a case of “jam tomorrow”. Emphasising how thickly the jam might be spread cannot hide the fact that production is expected to be broadly flat until 2009. No production growth and a target of 100 per cent reserve replacement until 2008 will not narrow the gap with its peers. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Shell Plan Disappoints Investors

Financial Times: Shell Plan Disappoints Investors

“Scandal-hit oil giant Royal Dutch/Shell will invest $45 billion over three years to boost reserves and production but its shares fell on disappointment it did not extend a stock buyback program.”: “Shell’s reserves cut caused the ousting of its previous top directors, led to $150 million in regulatory fines and cost the group its “AAA” top-grade credit rating.”: “Shell is such a long turnaround story that BP looks a less risky bet,’” said Cavendish Asset Management fund manager Paul Mumford.”

By REUTERS

Posted 23 Sept 04

LONDON (Reuters) – Scandal-hit oil giant Royal Dutch/Shell will invest $45 billion over three years to boost reserves and production but its shares fell on disappointment it did not extend a stock buyback program.

Shell, the world’s third-largest oil company, had shocked investors in January by slashing its proven oil and gas reserves by 20 percent. Subsequent smaller reserves cuts further dented investor confidence.

In a strategy presentation on Wednesday, Shell said it would spend a total of $15 billion a year in 2004/06, mostly on major gas and oil projects. It also plans to sell assets worth $10-$12 billion over the period to strengthen its finances. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com
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