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Irish Independent: Why Shell should sell off its offshore site

Why Shell should sell off its offshore site


Irish Independent; May 11, 2006 



BELATED political leadership is turning sentiment against the Rossport Five.


But there are doubts about Shell's competence to resolve the Corrib development: Last week Shell bosses seemed to say that they would move gas processing offshore – before reneging on this soon afterwards.


The real reason is that would cost 300m and the original gas sale deal did not extract the highest price from Bord Gais.


Suggestions that alternative pipeline routes would be considered do not get much support from a cursory perusal of Google Earth. Only four alternatives from Shannon to Sligo were identified in the original survey, of which the chosen route was best. Altering the route at this stage would incur extra cost and planning delays. But the perception of corporate duplicity is as damaging as its reality.


Soft PR regrets for past arrogance clashed with legal tactics – as if one corporate hand doesn't commune with the other. Logically, the Rossport Five were committed for contempt by a no-nonsense High Court judge. In theory this has nothing to do with Shell.


In practice the link was clear and damaged Shell's brand. Apologies for past arrogance clashed with moves this week for a permanent injunction that – logically – would commit the Rossport Five aris.


With the narrow moralism of a reformed drunk, Shell has written down its assets and apparently written off the gas reserves – in line with a general requirement for an immediate gas market. But this makes it easier to exit gracefully.


Having sold its petrol stations – an example which Statoil is now following – why does Shell need the hassle? It has attracted adverse publicity which is nonetheless damaging, though largely ill-informed. Shell needs to boost reserves with major projects, as with Canadian tar sands.


Corrib is a small project in difficult, frontier conditions that makes no material contribution to the group.


Majors are not good at going native.


They should sell the project off to an Irish-fronted group better able to work with the locals. Fresh faces will help.

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