nxs = the dentist, page-28

This was released today by Shell.. Interesting read


Crude Price Slump May Help Shell Gain Access to More Reserves

By Fred Pals and Eduard Gismatullin

March 11 (Bloomberg) -- Royal Dutch Shell Plc and other
international oil companies may get greater access to reserves as
resource-rich nations seek capital and technology for fields that
have become harder to develop since crude prices slumped.

Shell, Europe’s biggest oil company, and rivals BP Plc and
Exxon Mobil Corp., struggled to increase reserves when oil prices
were at a record. Nations with hydrocarbon deposits, including
Russia and Venezuela, renegotiated contracts in favor of national
oil companies to keep a larger slice of their energy wealth for
themselves. Crude prices have fallen about $100 a barrel since
reaching an all-time high in July.

“Oil prices are lower, and may continue to stay low for a
period, and that will ease access to reserves,” Shell Chief
Executive Officer Jeroen van der Veer told Bloomberg News in an
interview in London on March 4. “It is not happening now, but it
will happen.”

Shell was forced to cede a majority stake in Russia’s
Sakhalin-2 oil and gas project in 2007. OAO Gazprom, the state-
run gas exporter, took control after regulators threatened to
close the $22 billion project on environmental grounds.

“We have learned how to work in Russia, we are quite keen
to invest there,” van der Veer said.

Shell and its rivals will seek stakes in hydrocarbon
projects planned by cash-strapped national oil companies, Nansen
Saleri, chief executive officer of advisory firm Quantum
Reservoir Impact in Houston, said on March 3. Assets in the
former Soviet Union “are very attractive if you have the capital
and the knowledge,” he said.

Oil Services

Cost deflation will make it easier for Shell to negotiate
contracts with oil service companies and suppliers, according to
van der Veer. It typically takes about “12 to 18 months” for
the drop in prices to take hold, he said.

Shell made at least eight acquisitions last year, including
its C$5.27 billion ($4.1 billion) purchase of Canadian natural-
gas producer Duvernay Oil Corp. The company will spend between
$31 billion and $32 billion this year on investment, of which van
der Veer said “not a lot” would be earmarked for Russia,
because projects such as the country’s first liquefied natural
gas plant at Sakhalin have already started up.

Van der Veer will retire in July this year and will be
succeeded by Shell’s Chief Financial Officer Peter Voser. Van der
Veer, who took over as CEO in 2004 to restore confidence
following a reserves probe, will join the supervisory board of
Royal Philips Electronics NV in July and become vice chairman of
Unilever Plc, the world’s second-largest consumer-products
company.

Mars Platform

Shell posted its first quarterly loss in a decade in the
last three months of 2008 on the back of the oil-price decline,
and warned that industry conditions remain “challenging.”

The company postponed investment decisions on upgrading its
deepwater Mars platform in the Gulf of Mexico and developing the
Pierce field in the U.K.’s North Sea in anticipation of lower
costs. In October, it delayed a decision on the second-phase
expansion of its Athabasca oil-sands project in Canada.