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January, 2014:

Telegraph: Shell’s gas gamble has left a sour taste

from the Daily Telegraph:

Shell’s commitment to LNG came at a time when natural gas spot futures were trading above $17 per unit compared with around $4 today.

Just two weeks into his tenure, Royal Dutch Shell chief executive Ben van Beurden has had the tough job of delivering the oil major’s first profits warning in a decade. The last time Shell, a bellwether for British investors expecting reliable returns, provided such disturbing guidance it was Sir Philip Watts and the scandal over misstating the company’s oil reserves at fault.

Mr van Beurden has found himself in a similar position to his predecessor, Peter Voser, in having to deal with the consequences of strategic decisions made by previous hierarchies at the Anglo-Dutch company. Shell said that it expects earnings in the fourth quarter to be 70pc lower at $2.2bn (£1.34bn), but the scarier figure was the blowout in capital expenditure to $44.3bn.

Shell has pressed on with expensive high-risk projects, such as drilling in the Arctic, when some analysts would have preferred to see more capital restraint from management. The company is gaining an unwanted reputation for placing big strategic bets with investors’ money that don’t always pay off. Its significant investment into liquified natural gas (LNG) production and the more exotic gas-to-liquids (GTL) processing are perhaps good examples.

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