LONDON (AFX) – Investors will scrutinise Royal Dutch Shell PLC”s production and capital spending plans in the light of delays in key projects and cost overruns at the 7.3 bln cad Athabasca oil sands project in Canada on Thursday when it is expected to report bumper second quarter earnings.
The market keenly awaits an update on the cost issues at Athabasca after Shell warned early this month that spiraling prices of equipment, labour and supplies will further jack up budget for the project.
Shell Canada, which is majority owned by the PLC, owns a 60 pct stake in the Canadian field, while Chevron Canada Ltd and Western Oil each holds 20 pct.
Shell is also considering building a coal-to-liquids plant in China with partner Shenhua Ningxia Coal Industry Co Ltd. The facility, which will be designed to produce 70,000 barrels of oil and chemical products each day, is estimated to be worth at least 6 bln usd.
“This new amount could mean either an increase in capex post-2007, or a downgrade in the production profile following a decision to delay/cancel some project where it would be tough to guarantee profitability,” said Societe Generale in a research note.
Shell told investors in May that it will be delaying some projects due to cost pressures brought about by soaring oil prices.
Analysts believe these factors are likely to further undermine the oil major”s plans to build volumes to 4.5-5.0 mln barrels of oil equivalent per day by 2014.
Shell hopes to start pumping 3.5-3.8 mln boepd in 2007, and 3.8-4.0 mln boepd in 2009. It reduced its 2006 guidance to 3.5-3.6 mln boepd from 3.5-3.8 mln due to production disruptions related to the civil unrest in Nigeria and hurricanes in the US. Output fell 3 pct to 3.746 mln boepd in the first quarter.
Shell has set aside 19 bln usd for capital spending in 2006 and 21 bln usd for 2007.
For the quarter to June, the group”s net income, on an adjusted current cost of supply basis, is forecast to rise to 6.125 bln usd from 4.626 bln last time, as high oil and gas prices more than offset the impact of weak volumes.
Volumes are likely to have fallen again by 3 pct in the quarter to 3.42 mln boepd from 3.526 mln previously.
[email protected]
mbe/gp
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: 
MORE DETAILS:
A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
