Royal Dutch Shell Plc, Europe’s second-largest oil company, may need to cut more jobs this year to control operating costs as a recovery in energy demand waits until the second half.

“It’s normal in any business that you have to go further and you have
to operate your operating expenditure in a very tough way,” Chief
Executive Officer Peter Voser said in a Bloomberg Television interview
in Davos, Switzerland. “As part of that, it may also mean that some
more people have to go.”

Voser took over from Jeroen van der Veer in July and complained that
Shell’s operations had become “too complex.” Voser merged units and cut
about 5,000 jobs, including senior management posts. About 15 percent
of Shell’s refining capacity was placed under review, while the company
is also scaling back expansion in production from Canadian tar sands.

Swiss-born Voser inherited the industry’s biggest spending program in
2009, amounting to $32 billion, in the middle of a global economic
crisis that forced oil companies to delay some projects and cancel
others. Shell cut operating costs by about $1 billion in the first nine
months of last year.

“I’m a little bit more cautious on the recovery,” Voser said. “We still
see some effects from the stimulus package into 2010, some of the
consumption-driven demand is not coming back, so I’m rather more
pessimistic for the first half of the year than I am maybe for the
whole year or the second half.”

Voser’s Priority

Voser’s priority is to revive production growth with new projects in
Qatar and Malaysia after output fell below 3 million barrels of oil
equivalent a day. Shell has spent billions of dollars on unconventional
oil projects such as the gas-to- liquids plant in Qatar and is also
venturing into Iraq with exploration and production deals.

Shell is looking at Venezuela, Voser said. “We are studying the bids
which are now coming into the wider domain in Venezuela, and we will
decide if we bid or not in the future,” he said.

Venezuela’s oil ministry is taking offers from companies that paid $2
million each to bid for the minority stakes in three new projects that
will pump and refine oil from the Carabobo areas of the Orinoco Belt.
The winners will get a 40 percent stake in the projects.

Source: Bloomberg

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