Flames from a gas well 40km north of the Qatari capital Doha (KARIM SAHIB/AFP/Getty Images)

Flames from a gas well 40km north of the Qatari capital Doha (KARIM SAHIB/AFP/Getty Images)

Global trade in liquefied natural gas has doubled over the last decade and looks set to overtake pipeline gas trade before 2020. LNG is the only viable way of supplying most of the growing requirements of China and India, and the most obvious way of diversifying European supplies away from dependence on Russia. The growth in trade, however, also puts the spotlight on the sources of supply. Central to everything is the tiny Middle Eastern emirate of QatarRead more

The package of announcements from Shell will send a shiver through the oil and gas industry. After years of resisting investor pressure for more immediate gratification, the company which more than any other regards itself as a social institution dedicated to the long term, has blinked. Capex is to be radically reduced. Costs are to be cut with a sharp knife. $15bn of assets are to be sold – enough in themselves to form a medium sized company. And the dividend is to be increased. There is a touch of theatricality in combining a profits warning with a dividend increase but the show satisfied the immediate audience. The shares rose. For the rest of the sector, Shell’s ability to deliver in this way poses a dangerous challenge.

Underperformance is endemic across the industry. Investment always needs to be increased, the rewards are always promised for tomorrow. Among investors are innumerable funds whose need for cash returns is urgent. Since the downturn of 2008 the market has clearly become more short term and less tolerant of those who live on promises of a golden future which is always just over the horizon. Under pressure Shell has been able to make the adjustment, demonstrating that it can quickly cut enough to deliver a material and sustainable dividend increase even when oil and gas prices are flat to falling. That is a real measure of strength, as is BP’s ability to absorb a loss of $50bn to pay the bill for Macondo. Very few companies in the world have that capacity. Read more

Later this week the management of Royal Dutch Shell will finally explain why it has issued a profits warning only 12 weeks after its last formal statement to the market. Investors are waiting for a full and detailed presentation on Thursday. Anything less will reinforce the impression that there is a governance problem which has left top management and directors out of touch with the operations of the business.

Profit warnings are serious things, which means this is quite different from the normal public relations tactic of shovelling all the problems on to the back of an outgoing chief executive, and giving his successor a low baseline from which performance can only improve. Surely a company as serious as Shell is not playing that game? Read more

It seems bizarre to say that a company which will generate cash this year of between $40bn and $45bn has a fundamental structural problem. But the latest results from Royal Dutch Shell show just how weak the correlation between size and performance has proved to be. Capital expenditure is so high that even cash at that level may be insufficient to cover spending and dividends. The company looks lost – a lumbering dinosaur in a world where the prizes go to the quick and nimble. Read more

Congratulations to Ben van Beurden, the new chief executive of Shell. We are moving into a period when gas is the dominant fuel and Mr van Beurden has great experience in that area, particularly in liquefied natural gas. He is also Dutch which is a good reminder that despite everything Shell has not lost its nationality, after all. The candidates who lost will all soon find alternative jobs. Shell is now the great training ground and there is a shortage of talent at the top level in the international energy business. Mr van Beurden meantime will have to focus on Shell’s big problems, of which I will focus on three. Read more