Shell CEO: No Shortage of Oil
Shell CEO Heroen van der Veer, in an interview with Newweek’s Rana Foroohar, says that the recent drop in oil prices was to be expected and that there is no shortage of oil reserves.
Van der Veer comments to Foroohar that stocks of crude oil are "very normal or even better than normal." He says, "lines of ships at refineries, and things like that, are OK."
Van deer Veer says because there is no "physical shortage in the world" it is difficult to predict oil prices. Prices are determined by "geopolitical tensions in the world and the amount of nontraditional money like hedge funds moving into the oil market." He notes that estimates say hedge funds are investing more than $100 billion in oil markets right now.
When asked for a specific prediction, van deer Veer says that Shell does believe that "future prices will be significantly lower today."
Van deer Veer says that Shell’s future lies in so-called elephant projects, which are expensive, complex projects usually involving unconventionals, such as oil shale, oil sands, and deepwater reserves. Currently Shell is operating such projects in Sakhalin in Russia, Bonga in Nigeria, and Nanhai in China. The company expects to expand these programs to 10 in the next decade.
Van deer Veer also expressed concern about a windfall tax being levied on oil companies. The U.S. government, angered by high energy prices at the same time that oil companies are pulling in record profits, has threatened to institute a windfall tax. But van deer Veer says that a windfall tax would cut into the money that the company has earmarked for discovering new oil supplies. |
