(Adds detail, comment from interview)
AMSTERDAM (Thomson Financial) - Royal Dutch Shell chief executive officer
Jeroen van der Veer said high oil prices are slowing down new projects because
governments are taking longer to negotiate their slice of revenues.
"It is evident that active government interest is delaying projects," van
der Veer said in an interview published in Shell's Dutch in-house magazine this
month, adding that "government negotiations for their share of the revenues are
lengthier than in the past."
He refuted the idea that higher oil prices would actually accelerate
decision-making, saying "in reality the opposite is true".
And ultimately this will impact on the speed at which new projects can be
taken into production, van der Veer warned, although he did not specify which
Shell projects might be affected.
The interview went on to set out Shell's strategy for its stricken
operations in Nigeria, some parts of which have been shut following violence in
the Niger Delta, as well as van der Veer's view of Shell's forced sell-down of
its stake in the Russian mega-project Sakhalin-2.
Van der Veer said Shell would continue to invest in Nigeria provided its
employees can work there safely and he also warned that production would fall
rapidly if investment in the Nigerian oilfields was discontinued.
"Nigeria is very rich in oil and gas, onshore and offshore," he said. "If
you look at the long term, i.e. over decades, these reserves will indeed be
produced. We can and want to participate in this, but only if our people can
work safely there."
In relation to Shell's sale of its controlling stake in the giant Russian
Sakhalin-2 project to Gazprom last year, van der Veer said their were no hard
feelings.
"If this is something that bothers you, you should not participate in
international business. What we have learned from this is that you can only work
with large Russian partners in Russia."
In general though the company prefers to go it alone, certainly in contrast
to the old-style joint venture partnerships with international oil companies,
which were designed to spread risk.
"It is becoming increasingly important to distinguish yourself from the rest
by offering advanced technology, it is also becoming more important to take our
own lead in projects," van der Veer said, pointing to Shell's Pearl
gas-to-liquids project in Qatar which does not involve other oil companies.
But Shell will need to work with Russian partners if plans for a major
liquid natural gas project in the Jamal peninsula in the far north of Siberia
come to fruition.
Van der Veer was recently in Moscow with a Dutch industrial consortium and
submitted plans to President Putin for an LNG project at the large gas field.
"It really is very early days yet, but it's also extraordinary that a broad
consortium of specialist companies put a joint proposal on the table," of which
Shell would bring its LNG technology to the project.
"I also observed serious interest from Russian participants at the meeting,"
van der Veer added.
Kathy Sandler; kathy.sandler@thomson.com
agb/jlw/ks/jlc
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