CEO Shell: ‘World is not running out of oil’

THE HAGUE – CEO of Royal Dutch Shell, Jeroen van der Veer, emphasized that the world is not running out of oil and gas supplies in the near future. However, extracting fossil fuels is becoming increasingly more difficult, he told the shareholders of the Anglo-Dutch oil company.

‘The majority of the easy to produce sources is in production already’, Van der Veer told his audience on the annual shoreholders’ meeting.

For years, Shell is working on methods to extract oil and gas from the Canadian tarsands. The high oil price makes it affordable to pump oil up from sources in inhospitable places, such as the East-Russian project of Sachalin-II shows. “This will ask for big investments.’ In the beginning of May, Shell announced it will pump 19 billion US Dollars in oil field development.

Van der Veer indicated that the Sachalin-II project, in which Shell is a majority shareholder, is now completed for 70 percent. The oil company expects to start pumping oil and gas in 2008. Sachalin has suffered from many setbacks which resulted in an increase of estimated costs from an initial 10 billion to a current 20 billion Dollar.

After being criticized by environment protection groups, the oil company had to relocate oil pipes to prevent disturbing the habitat of the rare gray whale. Van der Veer acknowledged that Shell underestimated the harsh working conditions in Sachalin. ‘But the project remains an attractive investment.’

Prior to and during the shareholders’ meeting, loud protests were held against the oil company. ‘Environment Defense’ and ‘Friends of the Earth’ pointed shareholders to the environmental damage that accompanies the production of oil in Nigeria, according to these groups.

(Sorry, links are in Dutch again)
http://www.volkskrant.nl/economie/article318559.ece/Shell-topman_voorraad_olie_en_gas_raakt_niet_op

http://www.dft.nl/nieuws/9156301/Shell-topman:_voorraad_olie_en_gas_raakt_niet_op.html