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Webbolt Newsroom: Shell Planning to Open up Some 20 Billion BOE of Resources by the End of the Decade

Shell Planning to Open up Some 20 Billion BOE of Resources by the End of the Decade
By CJ – Webbolt Newsroom
May 10, 2006,   14:16

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LONDON, — Royal Dutch Shell plc (NYSE: RDS.A , NYSE: RDS.B) updated on its strategy today. Chief Executive Jeroen van der Veer commented “our strategy of 'more upstream, profitable downstream' is on track”.

“Upstream, we are committed to increase our production to 3.8-4.0 million barrels of oil equivalent in 2009, and we have record investments for our future in hand. Downstream, we are making selective growth investments, after a period dominated by disposals. Competitive cost performance and operational excellence are embedded in our strategy. Our downstream businesses should generate over $1.0 billion of further improvements by the end of this decade.”

“These are exciting times for Shell. We are making investments and taking final investment decisions by the end of the decade, which together will open up some 20 billion barrels of oil equivalent resources. These resources, which are around one third of our discovered resource base today, include substantial long-life fields, which will underpin our profitability for many years to come.”

He said the company is maturing around 50 major growth projects today, which should start up across 2006-09. “Around half are already under construction, in an unprecedented level of activity for Shell. Looking beyond 2009, Shell's portfolio is robust and growing, and the company is working on a larger number of further options, which underpin our aspiration for further production growth in the next decade.”

“We see great potential in unconventional hydrocarbons, in plays such as oil sands and gas-to-liquids. These 'unconventionals', and Shell's technology, should help us drive full replacement of our production, on both a resources and reserves1 basis, and sustain long term production growth.” said van der Veer. Such unconventional resources, however, may not qualify as SEC proved oil & gas reserves, where the company has previously forecast an average 100% SEC proved reserves replacement ratio over 2004-08.

Van der Veer said “We still have a fair prospect of achieving that target. However, we do not want this target to drive the wrong business decisions, either in the timing of projects, or in the type of resources that we prioritise. The industry is seeing a very tight market for materials and contract rates. Our requirement for competitive returns means that we will probably hold back some of our longer-term projects, until the supply and contracting environment cools down. That in turn makes achieving our SEC proved reserves replacement forecast less likely than it was.”

“We now see SEC reserves replacement across 2004-08 as an outcome of our investment choices, rather than a forecast. Our goal is to invest in the right projects, at the right time, within our framework of capital discipline, ” van der Veer said.

Chief Financial Officer Peter Voser concluded “we are focused on competitive returns, disciplined capital allocation, and organic growth. We expect to average 20-25% gearing through-cycle, including off balance sheet items. Organic capital spending for 2006 is expected to be around $19 billion, as previously indicated, with around $21 billion of spending anticipated in 2007.”

“Due to continued strength in oil and gas prices, and our capital discipline, we expect to exceed our previous guidance for up to $5 billion of share buy-backs in 2006. Share buy-backs will continue, subject to market conditions and the capital requirements of the group.”

1. Reserves meaning SEC proved oil & gas reserves, plus specific hydrocarbon categories that fall outside the SEC's current definitions, for example oil sands and other unconventionals. In such cases we will look to have high levels of confidence in our economic, technical and project maturity estimates.

In this document “Shell” is defined as Royal Dutch Shell together with all of its consolidated subsidiaries. The expressions “Shell”, “Group”, “Shell Group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to the Group or Group companies in general. Likewise, the words “we”, “us” and “our” are also used to refer to Group companies in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

© Copyright 2006 – Webbolt Company Limited All rights reserved.

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Dow Jones Newswires: Shell China Proj Prompts 2,700 Households To Be Resettled

By Benoit Faucon

LONDON (Dow Jones)–More than 2,700 Chinese households had to be resettled due to the construction of the Nanhai petrochemicals complex, its part owner Royal Dutch Shell PLC (RDSB.LN) said in a report Tuesday.

In its annual environmental and social report, the Anglo-Dutch major said that the relocation program was carried out according to World Bank and Chinese standards.

Shell owns 50% in the $4.3 billion project. The other half is owned by CNOOC Petrochemicals Investment Co. Ltd., a 90%-owned unit of China National Offshore Oil Corp. read more

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THE WALL STREET JOURNAL: Office Space in the Big Easy Gets Harder to Find

New Orleans's ComebackIs Swift, but Officials SayHuge Problems Lie Ahead By JENNIFER S. FORSYTHMay 10, 2006; Page B6

Eight months after Hurricane Katrina, the lights are back on in many downtown New Orleans buildings, creating a nighttime skyline that doesn't look that different than before the storm.

Despite Katrina — and, in some ways, because of it — the occupancy rate for top-quality office space is better than it was at the beginning of 2005. Many larger companies — especially those in the crucial energy sector — that temporarily evacuated have returned. Government relief agencies, contractors doing cleanup work and various advocacy groups have set up shop. And the market has tightened because some damaged offices haven't reopened, while others were converted to condos and hotel rooms before the storm. read more

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THE WALL STREET JOURNAL: Oil-News Roundup 10 May 2006

Oil-News Roundup

The WALL STREET JOURNAL ONLINEMay 10, 2006

Crude-oil futures rebounded, settling at more than $71 a barrel on the New York Mercantile Exchange, in part because of fresh anxieties about Iran's nuclear program. Here is today's well of news about oil and fuel prices.

* * *

CASTRO'S OIL BONANZA: Cuba plans to let China and other countries drill for oil in its half of the Florida Straits, which lie between Cuba and Key West, the New York Times reports. U.S. laws have long banned drilling on the U.S. side, but rising energy prices have inspired a growing chorus of voices to call for the prohibition to end. Fidel Castro split the area with the U.S. in a 1977 treaty, and Cuba's side alone might have some 4.6 billion barrels of oil and 9.8 trillion cubic feet of natural gas. “This is the irony of ironies,” one lobbyist to end the U.S. drilling ban told the Times. “We have chosen to lock up our resources and stand by to be spectators while these two come in and benefit from things right in our own backyard.” read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

The Times: Need to Know: Energy

  • Royal Dutch Shell, the Anglo-Dutch oil giant, blamed attacks by militants on pipelines in Nigeria and hurricanes in America for missing its goal of reducing oil spills in 2005. About 340 tonnes of oil flooded land in Nigeria in December.

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    Regal Petroleum, the London-based oil and gas producer, said that it will shut its Ukrainian gasfields after losing a legal battle with CNGG, its former joint venture partner. Separately, Richard Griffiths, former chairman of Evolution Group, the broker behind Regal, has left the company with a final pay package of almost £3 million. Platinum Mining Corp of India, the AIM-listed company, is facing a revolt from Steven Newbury, its former chief executive and largest shareholder, who has requisitioned a meeting to shake up the board. is planning to sell its Dutch gas exploration and production operations which produce 1.8 million cubic feet of gas a day. Bateman Litwin, which provides services to the oil, gas, power and chemical industries, has set a 180p-215p price range for its initial public offering, which will see the group raise about £55 million ahead of its flotation on AIM this month.

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    ALSO IN THIS SECTION
    Need to Know
    Head of Regal's broker left with £2.9m pay
    Venezuela doubles tax on oil majors
    Regal Petroleum shares dive after court setback in gasfield dispute
    Shell pays £1.1bn for Canada sands firm

  • royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

    AP Worldstream: Wresting control from foreign interests, Bolivian government names directors to energy companies

    Wresting control from foreign interests, Bolivian government names directors to energy companies
    CARLOS VALDEZ
    AP Worldstream; May 10, 2006

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    Bolivia is taking new steps toward wresting control of its natural-gas industry from foreign companies, naming Bolivian directors to oversee the companies' transition to majority ownership by the government. read more

    royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

    THE NEW YORK TIMES: Crude Oil Prices Slip

    Crude Oil Prices Slip

    By THE ASSOCIATED PRESS
    Published: May 10, 2006

    Filed at 1:29 a.m. ET

    SINGAPORE (AP) — Oil prices fell Wednesday as traders awaited a midweek U.S. government petroleum inventories report expected to show domestic gasoline stocks rose for the second straight week.

    Prices continued to be supported by persistent concerns about the outlook for Iran's oil exports amid the country's confrontation with the West over its nuclear program.

    Also, traders remain worried about unrest in Nigeria, violence in Iraq and rising resource nationalism in South America. read more

    royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

    The Guardian: Corporate profits

    Corporate profits
    The Guardian – United Kingdom; May 10, 2006

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    Governments have had to share the windfall gains from rising commodity prices with giant oil exploration and mining companies. Much of the price rise has been absorbed by higher profits, as the recent performance of BP and Shell testifies. The mining company Rio Tinto saw its underlying profits rise 118% to $5bn (pounds 2.7bn) in 2005, with the chairman, Paul Skinner, expecting the outlook to remain good. “We believe economic growth will continue the positive trend of 2005 even if rates of growth slow somewhat,” he said at the company's annual meeting last week. “This, in turn, should result in a continuation of strong markets for our products and prices above the long-term trend.” read more

    royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

    Irish Times: Legal challenge to gas pipeline will not be heard before October

    Legal challenge to gas pipeline will not be heard before October
    Mary Carolan
    Irish Times; May 10, 2006

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    The full hearing of a legal challenge to the construction of the controversial high-pressure gas pipeline near Rossport in Co Mayo will not be ready to proceed before October next, the High Court heard yesterday. read more

    royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.