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Royal Dutch Shell Plc .com: Meet the oil CEOS

Extracts from Petroleum News “Oil Patch Insider”

Meet the oil CEOS
By Rose Ragsdale

Top officials at Chevron, Shell and ConocoPhillips sat down with Tim Russert on Meet the Press June 18 to address the questions, “‘Why are gasoline prices so high, while oil company profits are soaring?’ and ‘Can we be self-sufficient in our energy needs?’”

Russert said polls show the American people have overwhelmingly negative feelings about oil companies.

Chevron CEO David O’Reilly said he could understand why most people feel negative toward the industry because rising gasoline prices have been a shock. But the huge profits earned recently by oil companies have created a misperception that the industry is outrageously and consistently profitable. In reality, the oil industry’s profits over the long term are in the mid-range when compared with other industries, he said.

Shell CEO John Hofmeister said the high profits mean more capital is being reinvested in finding more oil and that wouldn’t be possible without the high prices. While crude oil is selling well, Hofmeister said the industry’s retail gasoline and chemicals segments are actually struggling to turn a profit.

ConocoPhillips CEO Jim Mulva said the oil industry has done a poor job of educating the public about what it does and why.

Russert also asked why Brazil is becoming energy self-sufficient and the United States is not. He noted that Brazilians are selling both ethanol made from sugar cane and gasoline at the pump.

Mulva said Brazil’s secret is not a reliance on ethanol but rather its thriving oil industry where production has jumped nine-fold in recent years.

In the United States, relying on ethanol made from corn would drive up food prices, Hofmeister said. The oil companies are currently testing ethanol production from plant waste, but the real solution is to increase oil supplies by exploring for more oil, especially offshore in U.S. coastal waters, the CEOs added.

A complete transcript of the interview is available at:


Shtokman announcement expected in July
By Ray Tyson

Statoil believes Russia’s gas monopoly Gazprom will announce its choice of partners for the huge offshore Shtokman project during the G8 summit in St. Petersburg in July, rather than August as Gazprom previously announced. U.S. oil majors Chevron and ConocoPhillips, as well as Norway’s Statoil and several other foreign companies, are said to be the leading candidates to partner up with Gazprom. “We are led to believe that it will probably happen in connection with the G8 summit,” Peter Mellbye, head of Statoil’s international exploration and production division, told Reuters during a June 15 presentation to analysts in Stavanger, Norway. The summit is scheduled for July 15-17.

Gazprom initially was to announce its choice of partners for the Barents Sea Shtokman gas project in April. Gazprom intends to convert Shtokman natural gas into liquefied natural gas primarily for the U.S. market. However, relations between the United States and Russia have cooled over issues including membership in the World Trade Organization and competition for allies among former member states of the former Soviet Union. The U.S. has accused Russian leaders of playing power politics with the country’s vast gas and oil resources.


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