Aleem Khan

Roy­al Dutch Shell's po­si­tion as a world leader in liqui­fied nat­ur­al gas (LNG) has been strength­ened by its pur­chase of Rep­sol's LNG as­sets in­clu­sive of its stake in Point Fortin-based At­lantic (for­mer­ly At­lantic LNG), a se­nior vice pres­i­dent of the com­pa­ny has said.

Dick Ben­schop, pres­i­dent of Shell in Hol­land, and world­wide vice pres­i­dent for gas, said in re­sponse to a ques­tion on the sta­tus of the US$6.7 bil­lion pur­chase: "The trans­ac­tion still has to be com­plet­ed, and there are many ar­eas where what is go­ing to hap­pen has to be spec­i­fied.

"For us, the pur­chase is im­por­tant for two rea­sons. LNG pro­duc­tion in T&T and Pe­ru, that will be in­cor­po­rat­ed in­to our port­fo­lio will strength­en Shell's po­si­tion as the in­ter­na­tion­al leader in LNG. And, sec­ond, be­cause of the in­cor­po­ra­tion of the trad­ing busi­ness. If you look at the port­fo­lio of con­tracts, Spain has re­ceived LNG for decades. This busi­ness is, every day, more and more glob­al."

The Econ­o­mista said Ben­schop was "one of the key play­ers in the pur­chase of Rep­sol's LNG as­sets" in­clud­ing its stake in Point Fortin-based At­lantic. From 1998 to 2002, Ben­schop was Hol­land's min­is­ter of for­eign af­fairs. He joined Roy­al Dutch Shell in 2003; has been post­ed as far as Kuala Lumpur, Malaysia, and has served as the com­pa­ny's world­wide head of strat­e­gy.

"If you ob­serve the graphs on the evo­lu­tion of LNG, you will see high mul­ti­ples of growth over the last 20 years and how it has not stopped grow­ing. For Shell, to add on Rep­sol's port­fo­lio will mean we will be able to meet the grow­ing de­mands of Asia and Eu­rope, as well as the new de­mand from the Mid­dle East, which is be­com­ing a great im­port mar­ket, with the sum­mer peaks in Dubai or in Kuwait, as well as the im­ports and ex­ports in South Amer­i­ca that make this busi­ness more and more glob­al," he said.

Ben­schop told the Spaniards' Econ­o­mist the US$6.7 bil­lion trans­ac­tion was "the fruit of a very am­bi­tious, in­te­grat­ed gas strat­e­gy."

He said: "We have de­vel­op­ment projects in Aus­tralia, for ex­am­ple, and a lot of in­ter­est in car­ry­ing out a gasi­fi­ca­tion project there. Our fore­cast now is for or­gan­ic growth in Aus­tralia, and in oth­er places too."

The growth a com­pa­ny can achieve by in­creas­ing out­put and en­hanc­ing sales is con­sid­ered or­gan­ic. It ex­cludes any prof­its or growth ac­quired from takeovers, ac­qui­si­tions or merg­ers.

The deal with Rep­sol is "an ex­tra­or­di­nary trans­ac­tion," he said, "but af­ter this type of ac­qui­si­tion, our strat­e­gy is to grow or­gan­i­cal­ly."

No change has been felt at At­lantic in Point Fortin, and no change will be felt be­fore the trans­ac­tion is com­plet­ed. The trans­ac­tion, the vice pres­i­dent said, is ex­pect­ed to be com­plet­ed in the sec­ond half of this year.

Asked what mar­ket share Shell would ob­tain with the ac­qui­si­tion of Rep­sol's LNG as­sets, Ben­schop said: "I think our mar­ket share would get to about ten per cent of the world's com­mer­cial LNG pro­duc­tion and ca­pac­i­ty, which would make us the world leader in LNG."

Price fix­ing al­le­ga­tions

Asked for a re­ac­tion to the Eu­ro­pean Com­mis­sion's raid on the of­fices of Shell and oth­er oil com­pa­nies (BP and Sta­toil) for al­leged price fix­ing in col­lu­sion with Platts, he said: "We main­tain full co-op­er­a­tion with the (Eu­ro­pean) Com­mis­sion. We can't com­ment any fur­ther, but we are of­fer­ing our full co-op­er­a­tion to the au­thor­i­ties."

Ques­tioned about his thoughts on the growth of shale gas in Eu­rope, he said: "Fas­ci­nat­ing things are hap­pen­ing in the gas sec­tor in Eu­rope. There will prob­a­bly be US gas be­ing used in Spain in the com­ing years. This will be a very in­ter­est­ing de­vel­op­ment and it will be ben­e­fi­cial to Eu­rope as it will gain one more source of sup­ply."

He said Eu­rope will be most cu­ri­ous about the po­ten­tial of shale gas, as it is be­ing banned in France and in some parts of Spain. "If there are new sources, the con­ver­sa­tion about con­di­tions and reg­u­la­tions could start, but that can't yet be said, not be­fore it be­gins," he said.

In Spain, there are many nat­ur­al sources, he said, and it will be "ben­e­fi­cial to the coun­try if the pop­u­la­tion ac­cepts them. I think we should do it."

He said in­no­va­tion around gas and com­bin­ing it with elec­tric­i­ty is grow­ing. The ef­fi­cien­cy of gas is seen in LNG for trans­port on trucks and boats, he said, adding that "there will be new gas de­vel­op­ments in the world." He said gas will be used more and will re­place coals in elec­tric­i­ty gen­er­a­tion.

Ques­tioned whether Shell is in­ter­est­ed in de­vel­op­ing shale gas in Spain, he said: "Our fo­cus in Eu­rope is in the Ukraine. We are al­ways look­ing but have no spe­cif­ic plans for Spain. We are in Chi­na and there are oth­er coun­tries such as South Africa or Ar­genti­na that in­ter­est us. There are many coun­tries with wells like Spain and Tunisia that have had no op­por­tu­ni­ties be­fore."

Asked to con­firm whether Ar­gen­tine gov­ern­ment in­vit­ed Shell to par­tic­i­pate in Va­ca Muer­ta, he said "there are some in­con­ve­niences" for him to talk on that top­ic. Va­ca Muer­ta is a large shale oil field and shale gas field in Ar­genti­na. It was dis­cov­ered in 2010 by the then Rep­sol-YPF.

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