Peter Voser regrets on unconventional oil and gas
Peter Voser said the failure of Royal Dutch Shell’s huge bet on US shale was a big regret of his time as chief executive of the company. Shell has invested at least $24bn in so-called unconventional oil and gas in North America. But it is a bet that has yet to pay off. “Unconventionals did not exactly play out as planned,” Mr Voser said.
From an oil industry expert: Unconventional Oil and Gas
The following is an extract from an article by Guy Chazan published on 6 October 2013 by the Financial Times under the headline: “Peter Voser says he regrets Shell’s huge bet on US shale”
Peter Voser said the failure of Royal Dutch Shell’s huge bet on US shale was a big regret of his time as chief executive of the company. Shell has invested at least $24bn in so-called unconventional oil and gas in North America. But it is a bet that has yet to pay off. Its North American upstream business has struggled to turn a profit and in August Shell announced a strategic review of its US shale portfolio after taking a $2.1bn impairment. “Unconventionals did not exactly play out as planned,” Mr Voser said.
In an attempt to catch up with smaller producers, Shell’s spending on R&D and exploration in the domain of “unconventionals” has exploded, but as admitted by Peter Voser, with very disappointing results.
Since this term – unconventionals – is appearing more frequently in articles about the oil and gas industry and Shell’s problems in particular, it may assist to provide a clarification of what it actually means.
A CONVENTIONAL oil or gas field is a typical field where oil and gas are produced from a reservoir via a well to which the production fluids are able to flow. These were the only types of reservoirs developed until quite recently.
UNCONVENTIONALS cover the range from shale oil and gas to tar sands where extraction of hydrocarbon from the reservoir rocks requires the extensive use of fracking or the application of heat (either in-situ or after removal of the rock from the ground).
The potential volume of “unconventional” hydrocarbons is far greater than “conventionals” – it has been known for many years that there is probably more oil in the Athabasca tar sands than there is in Saudi Arabia, but until the price of oil reached the current level it was simply uneconomical to produce.
The challenge of “unconventionals” is therefore the cost of production.
That is the stumbling block that led to the failure admitted by Peter Voser and probably a factor in his decision to take early retirement.
The scandal of Corporate bonuses, and why they continue:
Extract from an informative article by former Royal Dutch Shell senior executive, Paddy Briggs, published 27 Feb 2014
Seven-figure bonuses are common across the corporate world – at the very top of course! Here, for example, is what “The Guardian” reported about the remuneration of Peter Voser the then top man in Shell just under a year ago:
“Royal Dutch Shell Chief executive Peter Voser received a €3.3m (£2.8m) cash bonus in 2012, a year in which the Anglo-Dutch oil group reported a fall in profits from $28.6bn to $27bn. The bonus took his total salary package to €5.1m, down from €5.2m the previous year.”
Mr Voser has since left the Shell top job and is generally regarded as having been a pretty poor Chief Executive. But then at Shell, as in the City, payment by results seems not to be the order of the day. The “bonus” comes as a matter of right even if the profits fall.
Paddy Briggs worked for the Oil Company Shell for 37 years, retiring in 2002 to pursue other interests. He is now a writer, journalist and blogger – specialising in sport, politics, the Arts, pensions and his professional business subject of brand and reputation management. Paddy was, for four years, one of two pensioner-elected trustees of the £13 billion Shell Contributory Pension Fund.
Ben Van Beurden’s plans overshadowed by Peter Voser’s £22m pay deal
Extracts from an article by ROB DAVIES published on 14 March 2014 by The Daily Mail newspaper under the headline: “Shell boss Ben Van Beurden’s plans for the company are overshadowed by former boss Peter Voser’s £22m pay deal”
Shell boss Ben van Beurden’s grand plan to spruce up the oil giant has been overshadowed by criticism of his predecessor’s £22million two-year pay deal. The Dutchman set out a blueprint that will see Shell shrink its North American shale operations and improve efficiency by focusing on individual projects and businesses. But some investors seized on the fact that former boss Peter Voser earned £22million over two years – including a £1.5million bonus for 2013, a year that ended with the group’s first profit warning in a decade. One veteran City fund manager said: ‘Van Beurden said the 2013 performance was not what he expects from Shell. That begs the question of why any bonus was paid at all.’
Shell cuts spending in U.S. to lower shale exposure
Extracts from a Reuters article by Karolin Schaps and Dmitry Zhdannikov published 13 March 2014
LONDON, March 13 (Reuters) – Royal Dutch Shell will cut spending by a fifth and lay off staff at its American exploration and production business, the company said on Thursday, in another sign that oil majors are struggling to profit from the booming U.S. shale sector. The spending cuts announced on Thursday follow Shell’s decision in January to suspend its controversial Arctic drilling programme and pledge to cut capital expenditure and streamline operations worldwide after the company’s least profitable fourth quarter in five years. “I don’t think it is a matter of trying to reinvent the company in a fundamentally different way; it is a matter of tackling some of the issues that we know need tackling,” van Beurden told journalists on a conference call after Thursday’s strategy update.
Shell Cuts Americas Spending by 20%, Extends Refinery Sales
Ben van Beurden, CEO Royal Dutch Shell Plc
Extracts from an article by Eduard Gismatullin published on 13 March 2014 by Bloomberg News
Royal Dutch Shell Plc (RDSA) plans to lower spending in the Americas by a fifth as Europe’s largest oil producer focuses on more profitable operations. It’s “not acceptable” that Shell, now deploying about 36 percent or $80 billion of its capital in North America, has been losing money, Chief Executive Officer Ben van Beurden said.
Van Beurden has pledged to shrink spending costs this year and speed up asset sales including refineries after The Hague-based company issued its first profit warning in a decade. He also scrapped targets for cash flow, delayed drilling off Alaska and promised to restructure shale operations in North America.
Van Beurden plans to dispose of about $15 billion of assets through 2015. Shell agreed to sell holdings valued at more than $4.5 billion, including in Australia and Brazil, and is seeking buyers for stakes in oil and gas fields, as well as pipeline and fuel-marketing assets from the U.S. to Nigeria. The company may also exit its $6.3 billion investment in Woodside Petroleum Ltd.
Shell says Nigerian oil theft costs billions
Extracts from a Reuters article by Alex Lawler andSimon Falush published 13 March 2014
* Shell says $1 bln/month oil theft figure probably accurate
* Proposed legal changes curbing Nigeria’s oil output
* Some Nigerian risks worsened, Shell says in annual report
Nigeria is important for Shell because the African country provides almost 10 percent of the company’s output and is seen as a source of future growth.
The TRUTH will set you FREE.
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