Financial Times: Shell all but withdraws from Angola
By Carola Hoyos
Published: April 9 2004
Royal Dutch/Shell, Europe's second-largest listed energy group, has all but bowed out of one of the world's biggest new oil regions, selling its stake in a key field in the waters off Angola for $600m (£327m).
The company said: "We don't have critical mass in Angola. The funds will be reinvested in other parts of the business where we believe higher returns for our shareholders can be achieved."
Shell still owns a 15 per cent stake in Angola's exploration Block 34, for which no production plan is yet in place, it said.
ONGC Videsh, the Indian exploration and production company, has agreed to buy Shell's 50 per cent stake in Block 18, an oil field operated by BP, Europe's largest listed energy group and one of Shell's closest rivals.
The field is expected to yield 200,000 barrels of oil a day and will begin production in 2007.
The company's core areas, or "heartlands" as Shell calls them, are: the Gulf of Mexico, the North Sea, Nigeria, Oman, Brunei, Malaysia and Australia.
With many of those fields declining at an average rate of about 7 per cent a year, Shell is seeking new regions. But it has significantly trailed its competitors in finding new reserves.
It "missed the boat" in Angola, as one analyst said, and is focusing on the Canadian oil sands, oil in the deep waters of Brazil and Nigeria, oil and gas in Russia, the Caspian and the Middle East, and opportunities in the Chinese market.
Pressure to find new reserves of oil increased after the company said on January 9 that it would have to slash its proved reserves by 20 per cent, or 3.9bn barrels, because they had been wrongly booked with the SEC.
The revelation prompted a slew of lawsuits and investigations by regulators in the US and Europe and last month led the board to force the resignation of Sir Philip Watts, chairman, and Walter van de Vijver, head of exploration and production.
This week the company announced it had removed Frank Coopman, its chief financial officer for exploration and production, putting in his place Simon Henry, head of investor relations.
Mr Coopman, who was controller before becoming CFO of exploration and production in July 2002 and whose job included accounting for reserves bookings, was not fired. He was offered a similar-ranking job, but turned it down.
Shell would not say whether the move was linked to the reserves debacle and said the company and Mr Coopman were looking for a mutually acceptable alternative.