Member access

4-Traders Homepage  >  Shares  >  Euronext Amsterdam  >  Royal Dutch Shell A    RDSA   GB00B03MLX29

ROYAL DUTCH SHELL A (RDSA)

499
Real-time Quote. Real-time TRADEGATE AG - 04/27 09:59:37 pm
29.0460 EUR   +0.28%
12:16aDJShell Faces Pressure to Disclose Priorities
04/27DJLONDON MARKETS : FTSE 100 Notches Record High As HSBC Climbs
04/27 Government warns off BP suitors now Shell unavailable as 'white k..
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 
The feature you requested does not exist. However, we suggest the following feature:

Shell Faces Pressure to Disclose Priorities

04/28/2015 | 12:16am US/Eastern
By Justin Scheck 

LONDON--When Royal Dutch Shell PLC reports quarterly earnings on Thursday, investors will be hoping for some detail on how the company plans to cut spending to weather today's low oil prices--and simultaneously spend huge sums.

A poll of 10 analysts by Dow Jones Newswires predicts Shell's earnings from last quarter will be more than 60% lower than a year earlier on low oil prices and a 7% drop in production. At the same time, Shell is planning to acquire BG Group PLC for $70 billion, and is set to spend another $1 billion to drill for oil in the Alaskan Arctic, a plan that environmental groups are attacking.

While all of the big oil producers are seeking ways to cut costs, Shell's deal to buy BG will force larger decisions on spending priorities. Shell has said it would sell about $30 billion in assets if the deal closes, potentially exiting areas that don't fit into a business plan centered on liquefied natural gas and deep-water drilling.

"The focus on cash priorities has changed," said Santander analyst Jason Kenney. He says cost-cutting at Shell is necessary because the company hasn't been getting satisfactory returns on the capital it invested.

Shell representatives didn't immediately comment.

BG has assets in Brazil, East Africa and Australia that could augment Shell's strengths. The purchase is a wager that expensive offshore projects will eventually pay off and that the LNG market will grow as countries try to cut carbon emissions by burning gas instead of coal.

Before the BG deal, Shell said it would cut about $15 billion in capital spending over the next three years. The company released few details about what it would cut, Mr. Kenney said.

Shell executives have said the BG merger wouldn't affect plans to spend $1 billion drilling in the Arctic this summer, a project that has been criticized by environmentalists.

Shell's Arctic plans have been of concern to investors since its 2012 drilling program there failed. After paying more than $2 billion to the federal government to obtain Arctic licenses, Shell had to stop drilling early because of sea ice. Its rig was wrecked and the U.S. government imposed fines for Clean Air Act violations. All told, the company has spent about $5 billion on the Arctic. Oppenheimer analyst Fadel Gheit said that despite the problems, the spending is worth it because of the Arctic's potentially big oil reserves.

But in a bid to pressure Shell to drop the plan, environmental group Oceana and an environmental law clinic at University of Chicago Law School sent a report to the U.S. Securities and Exchange Commission Monday claiming that the company is understating the risks of its work in the Arctic.

Publicly traded companies are required to disclose financial risks in detail, and the Oceana letter claims that the Arctic environment is so hostile--and cleaning up a spill so difficult--that Shell faces multibillion-dollar risks.

Shell has disclosed that an oil spill and costly cleanup in the Arctic are risks, but Oceana's report claims other oil companies, including Norway's Statoil ASA, have given more detail on what arctic exploration entails.

"Shell has improperly failed to disclose the amount or nature of its potential liabilities," the 60-page letter claims.

Oceana counsel Mike LeVine said Arctic exploration is too risky to be conducted now, and Shell should put off its plans to explore--something that happened in the 1980s and 1990s, when an earlier oil price slump prompted companies to cancel Arctic exploration.

"We comply with all the relevant reporting requirements," a Shell spokesman said.

Shell has been trying to project a more environmentally friendly image, calling for government-imposed limits on carbon emissions--something that could help the LNG business as countries switch from dirtier coal to gas. Shell is unlikely to give up on the Arctic, Mr. Gheit said.

"The potential is enormous," he said.

Write to Justin Scheck at justin.scheck@wsj.com

Access Investor Kit for BG Group Plc

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=GB0008762899

Access Investor Kit for Royal Dutch Shell PLC

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=GB00B03MLX29

Access Investor Kit for Royal Dutch Shell PLC

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=GB00B03MM408

Access Investor Kit for BG Group Plc

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US0554342032

Access Investor Kit for Royal Dutch Shell PLC

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US7802591070

Access Investor Kit for Royal Dutch Shell PLC

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US7802592060

React to this article
Latest news on ROYAL DUTCH SHELL A
12:16aDJShell Faces Pressure to Disclose Priorities
04/27DJLONDON MARKETS : FTSE 100 Notches Record High As HSBC Climbs
04/27 Government warns off BP suitors now Shell unavailable as 'white knight'
04/27DJLONDON MARKETS : FTSE 100 Marches To Record High As HSBC Climbs
04/27DJAXA INVESTMENT MANAGERS S.A. FORM 8. : Royal Dutch Shell Plc
04/27DJM&G Inv Management Ltd Form 8.3 - Royal Dutch Shell Plc
04/27DJJapan's Inpex Secures 5% Stake in Abu Dhabi Oil Concession
04/27DJRoyal Dutch Shell plc 1Q 2015 -- Forecast
04/27 ROYAL DUTCH SHELL A : PRESS: Shell Lobbied EU To Favour Gas Over Renewables - Th..
04/27DJLONDON MARKETS : FTSE 100 Moves Lower, But HSBC Outperforms
Advertisement
Chart
Duration : Period :
Royal Dutch Shell A Technical Analysis Chart | RDSA | GB00B03MLX29 | 4-Traders
Income Statement Evolution
More Financials
Dynamic quotes  
ON
| OFF