• China lends Nigeria Dollars 2bn in exchange for oil talks. • Ft com site : China oils Nigeria talks with loan

telecommunications and to transfer other public enterprises to private sector management. In 2001 Niger successfully privatized its telecommunications monopoly; however, the privatization of other industries has stalled. The privatization of the state-owned electric utility (NIGELEC) and the national oil distribution company (SONIDEP) are on hold indefinitely.
Foreign Aid
The most important donors in Niger are France, the European Union, the World Bank, the IMF, and UN agencies--UNDP, UNICEF, FAO, WFP, and UNFPA. Other donors include the United States, Belgium, Germany, Switzerland, Japan, China, Italy, Libya, Egypt, Morocco, Iran, Denmark, Canada, and Saudi Arabia. While the U.S. Agency for International Development (USAID) does not have a Mission in Niger, the United States is a major donor, contributing on average $30 million each year to Niger's development. In early 2008 Niger concluded an agreement for a $23 million Millennium Challenge Account threshold program. Niger is a key participant in the Trans-Saharan Counter-Terrorism program. Niger also benefits from the largest non-emergency PL 480 food assistance program in West Africa. Foreign aid represents 8.3% of Niger's GDP and over 40% of government revenues.
DEFENSE
The Niger Armed Forces total 12,000 personnel with approximately 3,700 gendarmes, 300 air force, and 8,000 army personnel. The air force has four transport aircraft. The armed forces include general staff and battalion task force organizations consisting of two paratroop units, four light armored units, and nine motorized infantry units located in Tahoua, Agadez, Dirkou, Zinder, Nguigmi, N'Gourti, and Madewela. In 1991, Niger sent a 400-man military contingent to join the American-led allied forces against Iraq during the Gulf War. Niger provides a battalion of peace-keeping forces to the UN Mission in Cote d'Ivoire.
Niger's defense budget is modest, accounting for about 1.6% of government expenditures. France provides the largest share of military assistance to Niger. Approximately 18 French military advisers are in Niger. Many Nigerien military personnel receive training in France, and the Nigerien Armed Forces are equipped mainly with materiel either given by or purchased in France. Morocco, Algeria, China, and Libya are also providing military assistance. A small U.S. foreign military assistance program was initiated in 1983. A U.S. Defense Attache office opened in June 1985 and assumed Security Assistance Office responsibilities in 1987. The office closed in 1996 following a coup d'etat. The U.S. Defense Attache office reopened in July 2000. The United States provided transportation and logistical assistance to Nigerien troops deployed to Cote d'Ivoire in 2003.
Additionally, the U.S. provided initial equipment training on vehicles and communications gear to a company of Nigerien soldiers as part of the Department of State Pan-Sahel Initiative. Military to military cooperation continues via the Trans Saharan Counter-Terrorism Partnership and other initiatives. EUCOM contributes funds for humanitarian assistance construction throughout the country. In 2007, a congressional waiver was granted which allows the Niger military to participate in the International Military Education and Training (IMET) program, managed by the Defense Attache Office. This program funded $170,000 in training in 2007.
FOREIGN RELATIONS
Niger pursues a moderate foreign policy and maintains friendly relations with the West and the Islamic world as well as nonaligned countries. It belongs to the United Nations and its main specialized agencies and in 1980-81 served on the UN Security Council. Niger maintains a special relationship with France and enjoys close relations with its West African neighbors. It is a charter member of the African Union and the West African Monetary Union and also belongs to the Niger River and Lake Chad Basin Commissions, the Economic Community of West African States, the Nonaligned Movement, and the Organization of the Islamic Conference.
U.S.-NIGERIEN RELATIONS
U.S. relations with Niger have generally been close and friendly since Niger attained independence. Although USAID does not have a Mission in Niger, $30 million in annual official aid is administered through American and local non-governmental organizations with programs addressing food security, health, local governance, youth training, girls' education, corruption control, and improving the business environment. The U.S. Peace Corps program in Niger started in 1962. It currently has about 130 volunteers in country and celebrated its 45th anniversary in Niger in September 2007.
Principal U.S. Officials
Ambassador--Bernadette M. Allen
Deputy Chief of Mission--Donald Koran
Defense Attache--Lieutenant Colonel Marie Kokotajlo
Joint Management Officer--Don D. Curtis
Economic/Commercial/Consular Officer--Richard M. Roberts
Public Affairs Officer--Stephen J. Posivak
Peace Corps Director--Mary Abrams
USAID Country Program Manager--Mark Wentling
The U.S. Embassy in Niger is located on the Avenue des Ambassades. The telephone numbers for the embassy are [phone]-61 through 65, and the fax number is [phone]-67. The mailing address is B.P. 11201, Niamey.
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.
For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http: // www.travel.state.gov , where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http: // www.travel.state.gov . For additional information on international travel, see http: // www.usa.gov/Citizen/Topics/Travel/International.shtml .
The Department of State encourages all U.S citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.
Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.
The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer service representatives and operators for TDD/TTY are available Monday-Friday, 7: 00 a.m. to 12: 00 midnight, Eastern Time, excluding federal holidays.
Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http: //wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled "Health Information for International Travel" (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. [phone].
Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.
STAT-USA/Internet, a service of the U.S. Department of Commerce, provides authoritative economic, business, and international trade information from the Federal government. The site includes current and historical trade-related releases, international market research, trade opportunities, and country analysis and provides access to the National Trade Data Bank.
Document STDP000020080326e43q0002y
Royal Dutch Shell Plc 2008 Strategy Presentation - Final
21,315 words

17 March 2008

Voxant FD (FAIR DISCLOSURE) WIRE

FNDW

English

© Voxant Inc. All rights reserved.
JEROEN VAN DER VEER, CEO, ROYAL DUTCH SHELL PLC: Good afternoon. We have now first the safety instructions then the second safety instruction, we call that the disclaimer. It says, not only does this disclaimer says that today we have filed our 20-F, which is available on our website as well. The agenda, I want to go in to do it, you see an introduction by myself, business reports by our Executive Directors, finance by Peter Voser and then we have ample time for questions.
The first slide, financial summary, what we would like to emphasize, you see here the last four years. If you add it up, CCS earnings were $93 billion over four years. These are very large numbers but look at the investment side as well. We invested in four years time $60 billion of dollars.
And if we look at shareholders side, if we add up dividends and buybacks, that was $55 billion. So today we can say that we are in fact the leading investor in the energy, we are in the largest capital investment program in our history and at this moment we are the largest capital spender of all the international oil companies. And if I look at it different as well, we paid last year $9 billion of dividends. We think that's a very leading contributor in the financial markets and it was the largest dividend payout in our industry.
If I look at the Heartlands is that I will concentrate today on portfolio strategy, I'll first go to the business environment. We think we have a consistent view of the business environment whereas we realize that in this business environment we have many challenges and in fact volatility as well. But we see that as an environment is not to be negative about it, we see it in fact as an environment for good opportunities for Shell.
What is our strategy? Our strategy is more upstream and profitable downstream unchanged for quite some years. And I think a company who has a good strategy, then you don't have every year a new strategy or the other way around, a new strategy every year is probably not a good strategy. We have a strong focus on capital discipline. Within those two remarks let me say where the priorities are. First of all safety, both personal safety and process safety.
The second priority is operational excellence, so that is what we operate -- we like to operate as well. And our ambition is to have our assets in the top quartile of our industry, so relative to the competition. The third priority is strong project management and the fourth and not the last is our emphasis on technology. We think technology is a key differentiator for Shell. As I have said, I am aiming to move our portfolio into the top quartile. The top quartile, if you compare that with the industry, you have to do apples-to-apples, so Oil Sands with Oil Sands, deepwater with deepwater, complex refineries with complex refineries.
If I look at the top quartile you may wonder which aspects. We take a tailor-made approach for the class of assets, but it is nearly always we have one top quartile indicator what is the availability of the operating rate, so how does it make added value. One is which costs do you spend for that, so it is competitive cost benchmarking, and a third one is how is it placed regarding, for instance, of CO2 emissions. So we take the value costs and the external sustainable development behavior.
And of course it is not only about investments, as we have shown over the past years, however we can sell or divest assets as well. And we think of course that combination of investments and divestment is how you rejuvenate a portfolio.
If I go to the energy landscape in the business environment then we say the basis is the three hard truths we have privilege to know or privilege to many places, and so I'm very sure today about it. But the first hard truth is the increased energy demand and the demand is really increasing a lot.
Now why is that? We go from 6 billion people to 9 billion people and all people like to have electricity and they at least like to drive in a Tata or something better. The second hard truth is that the supplies of easy oil and easy gas will not be enough to satisfy this increase in demand. So that opens the space for unconventionals and renewables. And the third hard truth is that increasing use has strong implications for CO2.
If I go a bit deeper in this energy demand, if you quantify that, we expect, taking energy conservation into account, that despite that we expect that between now and the year 2025 the energy demand of all forms of energy will increase by 50%. And in the year 2025 we think that the hydrocarbons, being oil, gas and coal, still have market share so to say of 80%. So renewables will become important but it is quite far out and they grow from a very low level. So they have very high growth rates and percentages, but before they are big takes a long period.
Then there are of course some very important trends to think about it. I already mentioned CO2 and of course we have to think what technology can do about it. But there are other pressures as well in the business environment. Let me mention one of inflation, you can see that in the graph. And the inflation of our industry is considerable. CERA, the Cambridge consultancies from the U.S., they estimate that the inflation in our industry that is from projects is running at about 20%. A modest stasis of course were lack of capacity in the contracting world has to do with steel prices or all the things basically to make complex projects.
This is an industry-wide problem, it is not specifically Shell. Within Shell we have tried to mitigate that and there is cost increases either by locking, for instance, rigs early or to carve projects. Peter will talk more about it but basically we think if the industry inflation is about 20%, we assume that the Shell inflation, if that's a valid term, is around 10%.
Now how do we build new Heartlands? This slide may be familiar to you because the strategy has not changed so this slide has not changed. Now the purpose of the slide is to say it is all about to generate competitive returns. We do that of course in creating value in a way which has to deal with good safety and environmental performance.
Now I'm not going in great detail through the slide, but it is basically how we rejuvenate the portfolio by building new legacy assets, so assets which can perform over many years. And of course we grow at a downstream and we do that with selective growth. We hope to have sustained levels of investment, I mean investment in our organic growth, and we make decisions to invest and decisions to sell assets all the time on a global basis.
If I now go to technology you see this red line shooting up and that is basically saying that our reserve spend from a $0.5 billion level in the year 2004, in 2007 it was $1.2 billion. So these are the only costs which I support that they grow rapidly because I think it is fairly essential for our future. It is technology for today, so how we can improve existing assets, and it is technology for the future, where can we grow, where can we make even more value-added products.
We look as well in the renewables area, you know it, we like to have by the middle of the century at least one material renewable business. At this moment we think pretty good about next generation or second generation of biofuels, we concentrate our wind energy in North America and we are involved in second-generation thin film solar technology.
If I now go to project management, technology as a key differentiator but I think a second key differentiator is project management. It is all about having the capabilities for those very large projects on which you see some examples today. Last year we hired 5,000 new professional people, most of them in technical areas and most of them are mid-career hires. This is all to get the right capability, to get people with capabilities in place.
We have also recognized that in the up-front planning and design of major projects we still can make more of a difference. So we have now a rigorous system of checks and decision points before we make the final investment decision. This is all part of the Project Academy that we started in 2004 basically driving more professionalism into our projects. Now that makes sense if you see our very large spending level that we try to do there the most professional job.
In some cases this does mean that we deliberately delay the final investment decision as well. So why would we delay such a final investment decision? If we think we'll get a better design or to get the design right or that we can work with possible costing initiatives to beat the pressures from the contractor market. I would also say that in our industry is it not only about very complex projects and the cost inflation, we see that we have challenges to get the right permits for investment as well. This is especially the case in OECD countries.
This slide shoes as well that we continue to make progress on safety and 2007 was again a better year than the previous years. It may be good for you to know that sustainable development that includes in our thinking personal and process safety, we build that into the remuneration of our staff as well as the factors.
New legacy assets under construction, now you see a typical Shell slide. My colleagues will be giving you the detailed updates of what we do there around the world. If you took a high-level picture, it is about 50 large projects under construction and of course we do many smaller projects as well. About 80% of the money that we invest, the capital investment, is in the upstream. There's a good mix of geographical spreads, mix of the range of technologies we apply and a range of tax regimes.
So what I try to say, it is a very balanced portfolio to manage all those different types of risk. In total we have some 10 billion barrels of upstream resources under construction. So what we construct we try to unlock 10 billion barrels. And if you put that in an annual rate, we talk about 1 million barrels per day of production.
In the downstream we are building at this moment 300,000 barrels today, that is basically the combination of our part of Port Arthur refinery and the downstream part of our gas to liquids process. This is about 8% of our overall downstream capacity. If you put it all together you have a portfolio that is orientated to organic growth. And why we do that you will see later profitability criteria by Peter. And if you look at the portfolio as well you will see there is a shift of our capital employed to the east and to North America.
Rejuvenating the portfolio, you can see that we expect strong growth, what I call from the technology plays like deepwater, gas to liquids and heavy oil. There is a growth potential in more traditional activities of refining and LNG. I have to say that in our project selection, and you see what we do now that we focus on projects that have very long production lives, sometimes for decades to come. And they are usually an integration of traditional upstream and downstream activities and of course we have capabilities in both. So it sounds a bit dramatic but I think the investment program we are putting in place that will underpin the Shell group in the first half of this century.
If I look at new production options, so if I start to look longer in the future, first of course we think what can we do in exploration. In exploration we are busy in 14 what we call focus basins. And most recently you have seen what we have done with the acreage in Alaska, that is quite exciting. We have strong resources positions now in Nigeria, Australia, Alberta heavy Oil, North America tight gas. Quite often we know the oil and gas is there and we are working on technologies and permitting to get the final investment decisions.
Overall if I look, this is not a project under construction, these are the projects in design. We have now 20 new projects in design. There is about 6 billion barrels of resources to unlock, which is about for an annual rate of 800,000 barrels per day oil equivalent. But this is not that far away, these are real projects where people are working on it.
If I look at no low carbon opportunities, it is all about for an energy company to produce energies which are affordable by consumers, convenient to use and of course preferably clean energies. Now today we do 3% of the world's natural gas and what is the cleanest burning fuel. However we realize that there are clearly upward pressures as well on the special emissions if we develop the heavier and harder to develop resources.
That's why we are involved in the development of a number of carbon capture storage initiatives. We think CCS, as it is normally labeled, we believe that is an important technology for the future and now we are moving to the demonstration projects phase for that technology. We have announced several projects to develop the next-generation biofuels, Rob Routs will come back to that. And I'm convinced that technology will play a major as well. So let's now go to the business presentations followed by Peter, and we'll start with Rob Routs.
ROB ROUTS, EXECUTIVE DIRECTOR, OIL PRODUCTS & CHEMICALS, ROYAL DUTCH SHELL PLC: Good afternoon, everybody. What have we done for you in the downstream last year? Basically another solid year with clean earnings of $8.3 billion, which was about 2% from 2006. Our products and chemicals are highly integrated but are reported separately, so our products reported clean earnings of $6.6 billion, down about 5% from 2006 mainly because of lower realized refining margins but helped a lot by marketing margins in the second half. And chemicals had clean earnings of $1.7 billion, which was up 40% from 2006.
Refining availability, something that we chase continuously, was slightly down in 2006 which was caused by a higher level of activity in turn arounds but also a higher level of unplanned shutdowns in the period, mainly caused by continued issues around labor and the quality of skills in the U.S. Chemical manufacturing availability on the other hand was higher and has helped us a lot going forward.
We continue, a couple years ago we talked to you about the implementation of global processes and systems, and this still is a major component of our cost control piece. We