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Posts on ‘February 19th, 2013’

Gas (Methane) Hydrates: A New Frontier


The following articles are very interesting.

If the technology proves successful vast new reserves of natural gas could be brought onto the market.

Note that Royal Dutch Shell is NOT one of the participants in this test.
US claims ‘unprecedented’ success in test for new fuel source – U.S. …: May 5, 2012 – Those crystals, known as methane hydrates, contain natural gas but so far releasing that fuel has been an expensive proposition. The drilling …
Alaska’s Methane Hydrate Resource Sparks Debate Over Energy …: Nov 11, 2012 – “Any exploration activities designed to extract methane hydrates run the risk of unintended consequences, of unleashing the monster,” he said. read more and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

Shell seems to have fallen into a trap

Screen Shot 2013-02-19 at 14.24.48

Brief extracts from an excellent informative article published today by “Seeking Alpha” under the headline: Why Royal Dutch Shell Needs To Acquire InterOil Now


Royal Dutch Shell (RDS.A) is perhaps the best example of a major that is suffering from diminishing returns on capital, faltering reserve replacement ratios (RRR), and significant excess capital yielding paltry returns. The stock has declined 4.83% year-to-date and 9.95% over the last year…

Shell seems to have fallen into the trap of chasing projects that are perceived as safe either because they are in benign jurisdictions or because they are the types of assets in which other majors are interested. In doing so, the company has exacerbated its risk profile by paying up for projects that depend on flat to rising commodity prices in order to generate acceptable returns. Shell’s woes in Alaska are a good example of the risks inherent in a region that conventional wisdom considers to be safe. The company has already spent $2.2 billion for leases to drill in offshore Alaska and approximately $2.8 billion for operations in the area over the past six years, without making any new discoveries. Shell failed last year to complete two exploration wells in offshore Alaska during the short ice-free summer season, and its drilling rig ran aground after breaking free from tow ships in high seas. read more and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.
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