Daily Telegraph (UK): Shell ploughs billions into finding more oil and gas: "Jeroen van der Veer, Shell's chief executive, also defended next week's restructuring of Shell Transport and Trading and Royal Dutch Petroleum into one company...": Thursday 23 June 2005

By Christopher Hope, Business Correspondent (Filed: 23/06/2005)

Shell yesterday came out fighting with plans for 10 multi-billion dollar investments - termed "elephant" projects - by 2015, while pouring hundreds of millions of dollars into research and development to help the Anglo-Dutch giant boost production by 31pc to 5m barrels of oil and gas a day by 2015.

Jeroen van der Veer, Shell's chief executive, also defended next week's restructuring of Shell Transport and Trading and Royal Dutch Petroleum into one company, which will leave up to 2,000 UK holders of Royal Dutch stock nursing a large capital gains tax bill.

Mr Van der Veer said production was expected to flat-line until 2008-09 and then jump sharply as fields that were reclassified as "unproven" during last year's crisis start to produce oil and gas.

He said: "A lot of our projects are back-end loaded to this decade. That is one of the issues that we have struggled to get to the market. We will unlock 13billion barrels of reserves that are not in production now. We know the stuff is there. You need projects to unlock this."

The leap in production was "relatively insensitive to the oil price", he said, adding that, by 2015, 500,000 barrels a day will come from unconventional reserves such as sands fields in Canada. A further 10 elephant projects, costing over $1billion, up from three today were likely to come on stream.

Shell had learned the lessons of last year's crisis when it wrongly categorised over a quarter of its reserves. The oil major had since set up academies to advise on how to develop fields and to improve the "quality of our proposals to host governments". Shell was also appointing 10 "chief scientists" and increasing spending on R&D from $553m to $700m a year.

Mr Van der Veer admitted that the restructuring could be "painful" for some British holders of Royal Dutch shares. However he added: "We can only make this deal fair if we have make the same offer to all people."

Turning to the board, Mr Van der Veer suggested that Shell was unlikely to hire another Dutchman as chairman when Aad Jacobs stands down next year. "You have to strike a balance, but it starts with the best person for the job," he said.

Mr Van der Veer said a change in the Dutch retirement age to 65 could allow him to stay until 2013. He was due to retire when he is 60 in 2008.

"I have a lot of energy to go for it. But I am getting the company out of a crisis. This is a later concern," he said.

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