Photos of the 1,000-ton drilling rig being placed in its spot atop the Mars oil platform in the Gulf of Mexico. The drilling rig was damaged during Hurricane Katrina. The photos are from Shell. (Shell)
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Shell's Mars platform, right, is being repaired by a crew on The Hermod, a Heermena crane vessel, left, Wednesday in the Gulf of Mexico. Early next week, crews will use cranes to lift the toppled drilling rig in two parts. Sharon Steinmann / Houston Chronicle HOUCHRON CAPTION (11/20/2005) SECBIZ COLORFRONT: CLEANUP JOB: The heavy-lift vessel Hermod, left, prepares to remove the 1,000-ton drilling rig that collapsed atop Shell's Mars platform in the Gulf of Mexico. For hours the platform was lashed by 175-mph winds generated by Hurricane Katrina (HOUSTON CHRONICLE)
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A Shell worker builds a welding shed Thursday, Jan. 11, 2007, aboard the Shell Mars Platform about 130 miles south of New Orleans, La., in the Gulf of Mexico. (Photo by Brett Coomer / Houston Chronicle) (HOUSTON CHRONICLE)
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According to Shell USA, this floating platform currently under construction in this Wednesday, Aug. 5, 1998 photo off the Caribbean coast of Curacao will be the world's deepest ocean oil rig. Once completed, it will be towed to a 4,000 foot deep submarine off the coast of New Orleans, USA. Shell has a 45 percent stake in the dlrs 1.45 billion project, while British Petroleum owns 23 percent, and Conoco and Exxon each own 16 percent. (AP Photo/Henky Looman) HOUCHRON CAPTION (09/13/1998): Shell USA's Ursa offshore platform, shown in August under construction off the coast of Curacao in the Caribbean Sea, will be the world's deepest ocean oil rig. British Petroleum, Conoco and Exxon are partners in the $1.45 billion project, which will be deployed in the Gulf of Mexic 4,000 feet above the sea floor. HOUSTON CHRONICLE SPECIAL SECTION: ENERGY. (AP)
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Timewise employees hold cars in line at Timewise Shell station at 511 Lockwood, where Shell was giving away 15 gallons of free gas to customers, Wednesday, Sept. 28, 2011, in Houston. The event lasted from 7a.m. until 8:30a.m. in Houston, and was repeated in four cities nationwide. The event was designed to showcase the benefits of high quality gas, according to Shell spokesman Sergio Roldan. "This event was to showcase the benefits of high quality gas to help customers protect their vehicles and same money on gasoline." ( Karen Warren / Houston Chronicle ) (Houston Chronicle)
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Jose Veloz gives the "thumbs up" from the drivers side of his Suburban as Timewise employee Sunny Ajose finishes pumping free gas for him at a Timewise Shell station at 511 Lockwood, where Shell was giving away 15 gallons of free gas to customers, Wednesday, Sept. 28, 2011, in Houston. The event lasted from 7a.m. until 8:30a.m. in Houston, and was repeated in four cities nationwide. The event was designed to showcase the benefits of high quality gas, according to Shell spokesman Sergio Roldan. "This event was to showcase the benefits of high quality gas to help customers protect their vehicles and same money on gasoline." ( Karen Warren / Houston Chronicle ) (Houston Chronicle)
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Timewise employee Becky Hunter celebrates after giving away free gas at a Timewise Shell station at 511 Lockwood, where Shell was giving away 15 gallons of free gas to customers, Wednesday, Sept. 28, 2011, in Houston. The event lasted from 7a.m. until 8:30a.m. in Houston, and was repeated in four cities nationwide. The event was designed to showcase the benefits of high quality gas, according to Shell spokesman Sergio Roldan. "This event was to showcase the benefits of high quality gas to help customers protect their vehicles and same money on gasoline." ( Karen Warren / Houston Chronicle ) (Houston Chronicle)
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Timewise employee Becky Hunter celebrates after giving away free gas at a Timewise Shell station at 511 Lockwood, where Shell was giving away 15 gallons of free gas to customers, Wednesday, Sept. 28, 2011, in Houston. The event lasted from 7a.m. until 8:30a.m. in Houston, and was repeated in four cities nationwide. The event was designed to showcase the benefits of high quality gas, according to Shell spokesman Sergio Roldan. "This event was to showcase the benefits of high quality gas to help customers protect their vehicles and same money on gasoline." ( Karen Warren / Houston Chronicle ) (Houston Chronicle)
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President and CEO of Edison Chouest Offshore, Gary Chouest (R-L) gives Shell Alaska Vice President, Pete Slaiby a tour of Shell Hull 247 at the Edison Chouest Offshore's North American Shipbuilding facility in Larose, La. (Chronicle)
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Shell Hull 247 pictured at the Edison Chouest Offshore's North American Shipbuilding facility in Larose, La. (Chronicle)
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Shell Alaska Vice President, Pete Slaiby (L-R) talks with President and CEO of Edison Chouest Offshore, Gary Chouest just after taking a tour of Shell Hull 247 at the Edison Chouest Offshore's North American Shipbuilding facility in Larose, La. Slaiby and Chouest are pictured in front of an unnamed vessel under construction at the facility. (Chronicle)
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Shell Alaska Vice President, Pete Slaiby (L-R) talks with President and CEO of Edison Chouest Offshore, Gary Chouest just after taking a tour of Shell Hull 247 at the Edison Chouest Offshore's North American Shipbuilding facility in Larose, La. Slaiby and Chouest are pictured in front of an unnamed vessel under construction at the facility. (Chronicle)
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Bill Soplu of Kaktovik, Alaska, demonstrates the use of one of several DP (dynamic positioning) simulators used to help train employees for work on large vessels at the Edison Chouest Offshore ship builing facility in Larose, La. Soplu, a deckhand for Edison Chouest Offshore, is in training to become an OSV (offshore service vessel) mate on Shell Hull 247. (Chronicle)
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Billy Pellegrin, QHSE Manager for Edison Chouest Offshore in Galliano, explains how the DP (dynamic positioning) simulator works to help train employees for work on large vessels. The simulator is one of several located at the Edison Chouest Offshore ship building facility in Larose, La. (Chronicle)
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Mary Dokianos of Shell Oil Co. photographs Brutus, a tension leg platform used for oil and gas drilling and production, at a construction facility in Ingleside, Texas, Tuesday, April 24, 2001. The total cost for the platform is expected to be about $760 million. The huge platform, with a 245-foot-by-245-foot deck nearly the size of two football fields side by side and about 40 feet above the water, will be working in 2,985 feet of the Gulf of Mexico. (AP Photo/Eric Gay) (AP)
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An undated file photograph shows a Shell oil company worker on an offshore oil platform in the Niger Delta, Nigeria. Leading non-Saudi oil exporters Russia, Nigeria and Mexico have pledged to boost production to offset rising oil prices and Nigeria's Presidential Advisor on Petroleum and Energy, Edmund Dakouro, has said his country could pump an additional 300,000 barrels a day of crude oil within 40 days, if the market needs it. (AP Photo/ Shell). HOUCHRON CAPTION (06/01/2004): A Shell employee works on an offshore oil platform in the resource-wealthy Niger Delta, which is plagued with violence. (AP)
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FILE--This undated file photo shows the Trident 8 oil rig in the Niger Delta, Nigeria. Militant youths took hostage dozens of oil workers, including at least eight foreigners, at a drilling rig off the coast of West Africa, but released them all Monday Aug. 27, 2001, Shell Oil said. (AP Photo/HO, Shell) (AP)
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CONTACT FILED: OIL RIGS-TEXAS. 04/17/2000 - The Deepwater Nautilus, billed as one the world's largest and most sophisticted semisubmersible oil rigs , dwarfs the pier in the Port of Galveston. The rig stands at about 35 stories tall and its crew quarters accommmodate 130 people. It is shown from Pelican Island across from its berth at Pier 39 &40 . The Deepwater Nautilus is in Galveston for final commissioning and loadout before commencing its five year contract with Shell Deepwater Development, Inc. in the Gulf of Mexico. (Melissa Phillip/Chronicle) HOUCHRON CAPTION (04/18/2000): The Deepwater Nautilus, a semisubmersible oil rig, arrives Monday in Galveston Bay. The rig, which stands 35 stories tall and houses 130 people, will undergo final commissioning at Pier 39/40 before beginning a five-year contract with Shell Deepwater Development Inc. in the Gulf of Mexico. (Houston Chronicle)
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The view from the Shell offshore drilling platform Brutus, off the south Louisana coast, looking out towards another large platform. 12/12/03 (Karl Stolleis/Houston Chronicle) (Houston Chronicle)
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Shell Oil's Mars platform is being repaired by a crew on The Hermod, a Heermena crane vessel. Workers are preparing the toppled drilling rig on Shell's Mars platform in the Gulf of Mexico for removal with cranes early next week. Sharon Steinmann / Houston Chronicle (HOUSTON CHRONICLE)
AMSTERDAM — Royal Dutch Shell PLC’s top executives dismissed weaker than anticipated fourth quarter earnings as a blip today and said Europe’s biggest oil company would embark on a new program to boost production, notably in North America.
Chief Executive Peter Voser said the fourth quarter earnings, which fell 4.3 percent to $6.50 billion from a year earlier, were hit by a sharp downturn in industry refining margins and North American natural gas prices.
But Voser said he was “pleased” with the company’s overall performance, and released new financial targets, including increasing production by 25 percent, from 3.2 million barrels per day on average in 2011, to 4 million barrels by 2018.
Shell also said Thursday it will increase its quarterly dividend a cent to $0.43 in 2012, its first increase in three years.
Even so, shares in the company dropped as the headline earnings disappointed and analysts moved to reduce their forecasts for upcoming years — by late morning London time, Shell’s share price was down around 2.4 percent at 22.70 pounds.
Analysts were also somewhat skeptical about the company’s plans, though most would agree that Shell’s position has improved since Voser took the top job in 2009.
Then, Shell had targeted a production increase to 3.5 million barrels per day by 2011. Although it missed that goal, its operations have benefited from the company’s emphasis on investing in new production, and from selling off refining operations. Shell said Thursday it generated $43.2 billion in cash flow in 2011, up from $33.3 billion in 2010, as several new projects have come on line.
Voser told analysts that with 60 new projects in the works around the world he expects a further increase in cash-flow of “up to 50 percent,” or around $200 billion for the four years 2012-2015, assuming oil prices as measured by the Brent benchmark remain in a range of $80 to $100 per barrel.
Shell plans $30 billion in capital expenditures in 2012, 80 percent of it on production projects, and 60 percent in North America and Australia, with a focus on liquefied natural gas, or LNG, projects.
“We have been looking for ways to leverage Shell’s strong resource position in North America,” Voser said, citing the company’s holdings of “tight” gas, or natural gas trapped in shale fields in Texas and Pennsylvania.
Voser said given current low gas prices, the company would likely focus on U.S. fields that contain both oil and gas, but it’s also looking at projects to transport and even export gas in the form of LNG to Asia.
“Let me stress that it’s early days,” he said.
Investec analyst Stuart Joyner said the fourth quarter results were below estimates and noted that Shell’s investment costs had been coming in higher than forecast.
“We expect to see material downgrades to the consensus estimate numbers for 2012 and 2013,” he said.
Looking more closely at the fourth quarter, Shell’s production profits rose 29 percent to $6.57 billion despite a drop in production from 3.49 million barrels per day to 3.31 million barrels. Part of the fall was due to asset sales.
Shell’s “downstream” operations, which include its refining arm and chemicals sales, lost $244 million, compared to a profit of $411 million a year ago. The company also paid nearly a billion dollars more in taxes.
The company said that on a “current cost of supplies” basis in both years, fourth quarter earnings would have risen 13 percent. The CCS measure attempts to strip out changes in the value of oil between when it is produced and when it is sold, including tax effects.
Chief Financial Officer Simon Henry said the fourth quarter earnings were “only a snapshot” of Shell’s improving long-term performance.
If you dont like the profits these companies make…quit buting their products. I don’t see anyone critique Apples profits when they buy an IpAD or Starbucks when they buy a up of coffee.
‘Only 6.5 billion? My word, looks like we’ll have to make up for it by paying more at the pump. Is it a pump or a one arm bandit?’
You obviously have no idea what it takes to successfully operate an E&P company. You can believe that every bit of that $6 billion would have been placed into turn-arounds and new projects coming online that would assist in finding and developing the world’s energy for the future. I don’t why people think that oil companies just like to sit back on their profits and laugh at the rest of the world. If they don’t continue to put back billions and billions of dollars into their companies, then the wells of today will dry up and they won’t be around for the future.
Only 6.5 billion? My word, looks like we’ll have to make up for it by paying more at the pump. Is it a pump or a one arm bandit?
$6.5 billion, most of which will go towards paying for the $30 billion in capital expenditure for 2012.
If you dont like the profits these companies make…quit buting their products. I don’t see anyone critique Apples profits when they buy an IpAD or Starbucks when they buy a up of coffee.
‘Only 6.5 billion? My word, looks like we’ll have to make up for it by paying more at the pump. Is it a pump or a one arm bandit?’
You obviously have no idea what it takes to successfully operate an E&P company. You can believe that every bit of that $6 billion would have been placed into turn-arounds and new projects coming online that would assist in finding and developing the world’s energy for the future. I don’t why people think that oil companies just like to sit back on their profits and laugh at the rest of the world. If they don’t continue to put back billions and billions of dollars into their companies, then the wells of today will dry up and they won’t be around for the future.