FINANCIAL TIMES: Lex: Marathon task: “Shell’s reserves problem remains”
29 April 05
In the 1960s film The Loneliness of the Long Distance Runner, the protagonist toiled across rough terrain as punishment for prior transgressions. Shell must know how he felt. Since last year’s initial reserves downgrade, the Anglo-Dutch oil major has made big strides in restructuring, returning cash and redeploying capital. As with arch-rivals ExxonMobil and BP, first-quarter results for 2005 beat expectations.
The big surprise was a cyclical upswing in petrochemicals. But Shell’s reserves problem remains. Its target of replacing all production across 2004-2008 implies an average renewal rate of at least 125 per cent a year from 2006. That would be quite a turnround, particularly with industry costs rising. Shell needs its longer-term, big-ticket projects to deliver.
Unfortunately, competitors will not wait and short-term capital markets tend to discount long-term gains. Reserves lives of over 12 years at Exxon and BP overshadow Shell’s nine. Shell might be tempted to buy its way out of trouble – gearing is just 17 per cent. But that would not be cheap. Asset swaps would make more sense.
But finding a partner willing to give up jam today will be difficult. Shell now trades broadly in line with BP on a 2006 enterprise value to debt-adjusted cash flow multiple of 9 times. But technical support from the unification of Shell’s shares will unwind after the summer, just as BP’s new production projects refocus investors on fundamentals. Shell will need to run hard just to stand still.
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
