Image by Shell
In this week’s readers’ Q&A session, Peter Voser, the chief executive of Shell, answers your questions.
In the second of two posts, he discusses the future of natural gas, the controversial process of “fracking” and why biofuels are the answer to powering transport.
Next in the hotseat is Chris Huhne, the UK energy secretary, who will be answering your questions on electricity market reform next Thursday, December 23rd. Send in your questions for consideration by the end of today – Friday, December 17th – to firstname.lastname@example.org.
But for now, over to Peter:
General Electric is paying $1.3bn for British pipeline-builder Wellstream, in a move to increase its exposure to Brazil’s oil industry. GE’s oil and gas arm already works alongside Brazil’s state-controlled giant Petrobras, the company that provides much of Wellstream’s revenues; now it can access Wellstream’s know-how and contracts, for a price moderately below what Wellstream was demanding.
The full FT story is here. But for investors, the deal holds three important lessons.
What will the election of Dilma Rousseff, Lula’s anointed successor, as president of Brazil mean for the country’s energy sector?
The short answer is that she surely owes her electoral victory to a large number of voters wanting things to change as little as possible. Brazilians are quite happy with the way things are going in the country at the moment, and Dilma, as she is known, ran on a continuity platform and is unlikely to make any radical changes in such an important area.
But she is not Lula, and some developments in the sector were already underway. The long answer, then, is that to the extent we are likely to see any changes, it is that the country’s energy sector may become more central to a national political and developmental strategy.
China is putting down roots in the backyard of Petrobras, newly-crowned share issue king of world stock markets, with the announcement of a $7.1bn oil alliance in Brazil between Sinopec and Repsol.
In the latest step in China’s global hunt for oil – and one of the more expensive – Sinopec, a state-owned oil and gas company, is to take a stake in the Spanish energy group’s Brazilian subsidiary in order to exploit its oil deposits in the country.
Sinopec will pay $7.1bn for 40 per cent of Repsol Brasil, with the remaining 60 per cent staying in the hands of Repsol, according to a statement from Madrid on Friday.