Updated: Jeroen van der Veer has been setting out his core message: the world is in recession and this is “a difficult financial environment indeed,” but Shell is staying focused on the long term.
It is investing in projects to come on stream over the next few years that will lift Shell’s production by 2-3 per cent per year between now and 2012.
He highlighted two projects in Qatar, Pearl gas to liquids and QatarGas 4, due to finish construction around the end of 2010, as examples of Shell’s growing portfolio of “long life” assets, that can sustain a production for many years or even decades, rather than declining the way conventional oil fields do.
Where the short term does come inn van der Veer says, is in terms of cash management. Soaring costs and plunging oil prices are squeezing Shell’s cash flow, as they are for all oil companies.
He stressed several times the virtue of a “flexible” balance sheet. In other words, he expects gearing to rise.
Early takes on today’s strategy presentation come from Reuters, which says Jeroen van der Veer, the chief executive, has indicated the dividend will grow by at least 1 per cent this year. BP has warned it will freeze its dividend. Reuters also reports that reserves were flat between 2007 and 2008.
Mr van der Veer suggested the industry was “bouncing along the bottom of the upstream and the downstream cycle in 2009″.
Shares were off almost 2 per cent at the time of writing.
Shell also repeated its warning that it was being investigated under the US Foreign Corrupt Practices Act, which prohibits corporate bribery anywhere in the world by companies operating in the US.
More coming soon from the company’s strategy presentation, which is under way now.