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Shell plans to cut $15 billion in capital spending over 3 years, and pull back on shale investments, in response to the drop in oil prices below $50 a barrel in 2015. Shell's CEO Van Beurden says the company will continue to focus on capital efficiency and project delivery and make prudent investments. Since taking over Van Beurden has pulled back from big spending, cut costs, and focussed on capital efficiency.

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Royal Dutch Shell will take  writedowns for impairment of assets as a result of low prices and the coronavirus for $15-$20 billion,

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Peaple points to the challenge facing new Royal Dutch Shell CEO, Ben Van Beurden, with low return on capital below 1% on U.S. projects from high costs and declining prices. Shell's 2013 price earnings multiple is at 8.1, well below Chevron and Exxon. Van Beurden will become the CEO in January 2014. He worked for Shell for 30 years, with 10 years in the LNG business.

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Shell will become a wholly British oil company and drop Royal Dutch from its name. Headquarters and tax residence will be shifted to London, England. Shell's move is intended to give it more flexibility to adapt to changes in the world energy sector with the effects of climate change on the use of fossil fuels.

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Changes to reduce costs at Royal Dutch Shell as Shell faces reduced refining margins.

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Important article on how an outsider, Jorma Ollila, who helped build Nokia from a sluggish Finnish conglomerate to a leader in the mobile phone business, is taking the top job at Shell and helping to give new direction to the company. Shell faces a changing playing field with the rise of national oil companies and difficult access to oil exploration sites. Ollila is the new chairman at Royal Dutch Shell.

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A $37 billion deal over 15-20 years for Australian LNG between Woodside Energy, Royal Dutch Shell and PetroChina, China's biggest oil and gas company. The is shows a shift to natural gas in the urban coastline areas of China such as Shenzen and Shanghai, a shift away from the dirter but cheaper coal based fuels as urban incomes rise and preferences change.

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Analysts are forecasting an average oil price of $106 for 2011, according to FactSet Research Systems. Brent crude is $110 a barrel in the third week of August 2011. This implies Brent crude has to be at an average of $95 for the remainder of 2011- suggesting a decline of 14% from todays levels. Share prices of European oil companies Royal Dutch Shell, BP, Eni and Total are priced for long term crude oil prices at $75 per barrel, according to Citi.

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The ship Prelude being built in S. Korean shipyards for Royal Dutch Shell measures 1600 feet for the hull from bow to to stern. It is designed to take gas and chill it to liquid as LNG from smaller gas fields where building pipelines is not the best option. It could supply enough gas to Hong Kong for one year. The entire processing plant is on the ship replacing the cost of building costly pipelines and plants. The LNG is then put on tankers for transport. The project is expected to cost $10 billion and Shell is going ahead with it even as it is selling stakes in costly projects in Australia to control spending. The advantages are that it is not affected by the rising costs of building gas pipelines on land in Australia, growing demand for LNG in Asia, and the technological viability of this method of producing LNG on ships for smaller gas discoveries where building pipelines is too costly.

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Risk taking CEO's steps at Shell appear to be paying off as Shell's share price does better than BP's. Better results in hiring, technology, management streamlining, in sourcing non-conventional output, and Libyan deal coming after restructuring of its Russian exploration project, all show improved prospects at Shell after new CEO took over. Jeroen Van der Veer, who assumed the CEO position in 2004, is interviewed by Chip Cummins and Guy Kazan at it London headquarters. Van der Veer took over after the scandal involving Shell's overstating of its oil and as reserves. His early steps were to centralize decisionmaking, do away with the dual board structure based in the Hague and London, and increase hiring of technology professionals. 4500 midcareer professionals were hired in 2006, a new Chief Technology officer was appointed, and seven "chief scientists," creating a new focus on technology development and research, and making technology leadership a critical part of its strategy. Van der Veer also bet heavily on new projects, including a $20 billion oil and LNG project on the island of Sakhalin in Russian Far East, and a $18 billion gas field plus natural gas to diesel plant in Quatar. Jeroen Van der Veer is described by colleagues as a thoughtful but firm and straight talking, low profile guy who joined Shell in 1971, at age 24. He ran a large Dutch refinery, tackling labor problems and implementing an expansion. He has a passion for long distance skating, having twice finished a 200 kilometer race through 11 cities in the Netherlands....

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Shell reported a 60% drop in profit for the second quarter of 2013, after taking a $2 billion writedown on the value of its liquids rich shale assets. Excluding the charges, Shell's profit was $4.6 billion, declining 20% on the prior year quarter. Shell has the largest investments among oil companies in unconventional sources of oil and gas in the U.S. It is producing 300,000 barrels of oil equivalent a day from unconventional sources, including 50,000 barrels of oil equivalent a day from shale at end of 2012. Shell expects the exploration and production division for the Americas to remain at a loss during the second half of the year because of current oil and gas prices. Shell is now conducting a strategic review to sell around half of its main nine unconventional oil and gas assets in North America.

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The advanced technology on the Noble Bully 1 oil drilling rig in deep waters 140 miles south of New Orleans. It is jointly owned by Shell and Noble Corp. The technological improvements on the rig could only have been imagined a few years ago. A Eiffel tower shaped structure is completely enclosed in the rig compared to open derrick structures used on earlier rigs. The technology includes GPS, wind sensors, motion sensors, hydraulic systems, computer controlled thruster propellers on the bottom of the vessel to drill wells with precision. It can operate in water 8250 feet deep to 12,000 feet with safety upgrades, and upto 40,000 feet. A similiar ship Noble Bully 2 operates on the coastal part of Brazil. A new platform called Olympus will be a tension leg platform floaing on the sea like a cork, held together by tying it to the ocean floor using cables. The project is called the Mars B development. New sensors use seismic technology with devices closer to the ocean floor in the Gulf picking up data. The data is sent to Shell scientists working onshore and produces four dimensional maps of oil reservoirs using computer chips. The cost savings for the smaller structure include less steel and less fuel used, zero toxic emissions, and operating with 160 workers- 40% less workers than previous rig designs. Veteran drillers say its a lot better working environment and lot safer. Chief drillers sit in "drill chairs" and adjust the speed and direction of drill pipes using joy sticks and computer screens. It is this kind of technology that countries like Mexico, Brazil, Argentina and India need to develop their off shore oil fields, creaing new opportunities for oil companies such as Chevron, Shell, BP, Exxon and Total. The new technology equiped drilling ships, platforms and LNG processing ships are a way for Shell to reduce costs and improve capital efficiency, the new focus for CEO Van Beurden in 2014-2015....

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Profits at international oil companies are lower for a number of reasons. At Exxon the refining margins dropped 27% in 2007 compared to 2006. Cost for drilling, oil rigs and oil personnel are up sharply, and the production sharing agreements for Exxon in West Africa mean that the higher the oil price the less oil Exxon gets. The govenments of oil producing countries are taking a larger share of dollar coming from oil in their countries, and Exxon recently pulled out of Venezuela- the production at Exxon actually declined by 2% and at BP and Royal Dutch Shell by 4%. This decline will continue as the reserve replacement ratios of these oil companies are in a big decline as oil prices go higher. Most of the countries producing oil are renegotaiting their contracts at the first opportunity. Nigeria is about to do this, and even Alberta and the US government are doing this.