Caspian Energy (CE): How would you assess the impact of the world oil prices crisis on the current and future situation in the global upstream sector? Is this sector going to change dramatically against the backdrop of possible mass business diversification of high-tech “seven sisters”, which include Royal Dutch Shell as well?
Jonathan French, Head of UK Media Relations, Shell International: Today's lower oil prices create both need and opportunity. We are driving the best value from our capital project design and execution and from the associated supply chain. Technology and innovation, is an important enabler for reducing capital costs and building a long term competitive edge for Shell; we need to provide and deploy breakthrough and affordable technology that materially contributes to capital efficiency.
CE: Does the acquisition of BG mean Shell’s continued efforts to concentrate business on the global gas resources? Do you consider gas as the world’s most promising free energy resource? What is its share in the investment portfolio of Shell?
Jonathan French: Shell is a pioneer and a leader in the LNG industry with fifty years’ experience. We were involved in the first commercial LNG plant, started up in Algeria in 1964. We have a long track record in innovation and technology.
Our LNG expertise goes beyond liquefaction plants. We’re involved in every stage of the LNG value chain: from the upstream (finding the fields and extracting the gas from them) to the downstream (liquefying the gas), shipping, turning the LNG back into gas and distributing it to customers. The combination with BG represents a tremendous opportunity to create value for both sets of shareholders, particularly in deep water and LNG.
The combination is a strong platform to refocus the company, to create a simpler and more competitive Shell.
CE: How attractive are the Caspian deepwater gas resources for Shell? Could you please tell about the plans on development of the Karachaganak project in Kazakhstan?
Jonathan French: The combination with BG reaffirms our commitment to Kazakhstan and expands our already substantive footprint in the country.
CE: How successful are Shell’s shale exploration operations in China?
Jonathan French: We have completed all drilling work in Sichuan under the PSCs. Evaluation of the drilling results is being completed and we should know more in the next few months.
We are in discussion with our partner CNPC on the next steps to take for all three Sichuan projects.
Shell is involved in a number of shale resource plays around the world including the US and Argentina where we are working towards lower break-evens through de-risking and restructuring projects.
CE: Could you please tell your plans on operations in Iran?
Jonathan French: We remain interested in exploring the role Shell can play in developing Iran’s energy potential, within the boundaries of applicable laws. Following the lifting of applicable EU and US sanctions, we can confirm that payment of the outstanding Shell debt to NIOC has now been made.
Interview made by Olga Nagiyeva