Forbes.com: Shell exec says U.S. acquisitions "not a priority"

By Joseph A. Giannone

Reuters 02.11.04, 5:00 PM ET

HOUSTON, Feb 11 (Reuters) - While Royal Dutch/Shell Group continues to seek ways to expand its North American natural gas business, the Anglo-Dutch energy major is not especially looking to expand through an acquisition, Shell managing director Malcolm Brinded told Reuters on Wednesday.

Shell, one of the world's largest oil companies, is frequently mentioned as a possible suitor in various takeover rumors. In the past few weeks the company has been named a likely acquirer of El Paso Corp. (nyse: EP - news - people), the Houston-based pipeline and gas production firm weakened by massive debts and its recent restatement of proved reserves.

But Brinded, chief executive of Shell's global gas and power division, played down such talk.

"It's not particularly on our radar screen," he told Reuters on the sidelines of the Cambridge Energy Research Associates annual conference in Houston. "You never say never, but it's not a priority for us."

Brinded, who delivered a presentation on the emergence of a global liquefied natural gas (LNG) business, noted the company still expects to grow through its own exploration and production efforts. The company says North American gas is one of several business lines it wants to expand.

"We'll do it through organic growth. In the Gulf of Mexico deepwater, we're still the largest producer and an active and successful explorer," he said. The second (area) would be in onshore gas in the Rockies, which has good growth prospects."

Overall, expanded production, LNG imports and the application of new production technology are all needed to keep pace with North American gas demand, he said.

DEFENDS OWNERSHIP STRUCTURE

On another matter, Brinded defended Shell's unique dual-parent company structure, which has come under attack since the company announced last month that it had overbooked its proved reserves by some 20 percent. Some investors are calling on the company to adopt a single parent structure, arguing it would help increase accountability to investors.

Shell is owned 60 percent by Amsterdam-based Royal Dutch Petroleum and 40 percent by London-based Shell Transport and Trading Co. Plc.

"We don't see a relationship between the structure of the company and the reserves re-categorization," Brinded said.

"We have to listen to what the people are saying, so we're listening to shareholders and we're listening to investors, but what I would say is there's a lot of misunderstanding of the structure," he added. "The fact we have a dual-parent structure has no impact on the internal management of the company."

Shell management has a chairman and four global business line CEOs, he noted. "We're like every other company except we have two parent companies in two different countries. All that said: we'll listen."

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