Shell unveils EUR 37bn plan to win confidence
22 September 2004 , AMSTERDAM — Anglo-Dutch energy giant Shell announced plans on Wednesday to invest USD 45 billion (EUR 37 billion) in oil and gas exploration in a bid to increase its reserves and restore investor confidence.
22 September 2004
AMSTERDAM — Anglo-Dutch energy giant Shell announced plans on Wednesday to invest USD 45 billion (EUR 37 billion) in oil and gas exploration in a bid to increase its reserves and restore investor confidence.
Shell chairman Jeroen van der Veer said the firm will invest USD 15 billion over each of the three years (2004-05-06), mainly on gas and oil projects. He also promised to sell non-strategic assets valued at EUR 8 billion in the same period.
The move comes after Shell shocked investors by cutting reserves by 20 percent in January. Additional cuts followed and under investigation by regulators, Shell agreed to pay penalties amounting to USD 150 million (EUR 117 million).
The scandal cost the jobs in March of chief executive Sir Philip Watts and the Exploration and Production division chief, Dutchman Walter van de Vijver. A third executive, chief financial officer Judy Boynton, quit in April.
Under the new leadership of Van der Veer, Shell has been trying to restore investor confidence, Dutch daily newspaper NRC reported.
And Van der Veer told BBC on Wednesday that the company was focused on improving its competitive position, cash generation and shareholder return. Replacing reserves was "a priority to support future growth".
Shell will concentrate on wells where it hopes to pump out more than 100 million barrels of oil. New investment will target areas with potential for growth and rising prices.
But shares dipped both in London and Amsterdam as investors reacted negatively. Some analysts said the company could have made a more explicit promise to extend its share buyback programme.
[Copyright Expatica News 2004]
Subject: Dutch news