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Posts on ‘January 25th, 2010’

Shell & Big Oil’s Exploration Challenge

THE WALL STREET JOURNAL

JANUARY 25, 2010, 9.32 A.M. ET

By MATTHEW CURTIN

These days, you have to corral an army of engineers in the desert to build an enormous factory to transform natural gas into a liquid to be used like oil. The capital cost of Royal Dutch Shell’s Pearl gas-to-liquids plant in Qatar is a cool $18 billion or more—10% of its market capitalization. Like Chevron’s Gorgon liquefied-natural-gas project offshore Australia, it shows what big integrated oil companies are capable of.

[shellherd0125] Associated PressShell has bumped up its exploration budget to $3 billion.

But have they neglected bread-and-butter exploration for lower-risk, lower-return engineering projects? Certainly, investors are unimpressed. A decade ago, the international oil companies, or IOCs, accounted for 79% of energy-sector market capitalization and nearly all its net income. Today the figures are 53% and 62%, according to Sanford C. Bernstein. Shell trades at a discount of 13% and 36% respectively to the 2010 forward price-to-earnings multiples at Petroleo Brasileiro and BG Group. But their estimated five-year average output growth is 5% and 9% compared with Shell’s 3%, around the IOC average. 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.

Exxon’s Sakhalin Troubles: A Redux of Shell’s Sakhalin II?

ExxonMobil is (XOM) at loggerheads with the Russian government over the Sakhalin I project. The issue is the one that eventually spelled Shell’s (RDS.A) doom in Sakhalin II: Development costs under the production sharing agreement (PSA):

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.

Exxon, Shell Sign Final Deal For Iraq’s West Qurna 1 Oil Field

THE WALL STREET JOURNAL

JANUARY 25, 2010

By Hassan Hafidh

Of DOW JONES NEWSWIRES

A consortium made up of Exxon Mobil Corp. (XOM) and Royal Dutch Shell PLC (RDSA) finalized a deal in Baghdad Monday to develop the West Qurna phase 1 oil field in southern Iraq, Iraqi oil officials said.

It represents the first time a U.S.-led group has been allowed into Iraq’s oil patch since the U.S.-led invasion in 2003.

Exxon and Shell won the right to develop the field following the country’s first postwar licensing auction held last year. The license to develop the field wasn’t initially awarded in the auction in June, but a deal was reached following subsequent negotiations. 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.

Royal Dutch Shell is the world’s 25th-biggest economy, bigger than Norway

A version of this article appeared in print on January 25, 2010, on page A16 of the New York Times.

New York Times Editorial

Big Food

As huge corporations merge and get even huger, we find ourselves yearning for some old-fashioned competition, and maybe a little diversity.

Banks have gotten so big that they can unleash havoc and bill us for the pleasure. Big Oil is so big that Royal Dutch Shell is the world’s 25th-biggest economy, bigger than Norway. Four -fifths of the chips in the world’s PCs come from Intel. In the United States, AT&T and Verizon account for over half of all cellular phone customers. Big companies are likely to become even bigger. Between 2003 and 2007, the number of big mergers reported to American antitrust regulators doubled to 2,201. Though merger activity fell during the financial crisis, it is expected to rebound sharply. There is already another behemoth lumbering toward consumers: Big Food. 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.

Shell to scale back on oil sands – CEO

Reuters UK

LONDON, Jan 24 (Reuters) – Royal Dutch Shell (RDSa.L) is slowing its expansion into high-cost Canadian tar sands, Chief Executive Peter Voser said in Monday’s edition of the Financial Times.

In an interview with the paper, Voser said Shell had scaled down plans to increase tar sands production to 700,000 barrels per day.

“Over the past two years and certainly over the past six to eight months, I’ve taken the pace out of that because we have enough other growth opportunities,” he said. Instead, Shell planned to rely more on conventional oil and gas reserves for future growth, he said, adding that Shell had become better at finding new oil and gas reserves after investing heavily in exploration. 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.
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