Differing needs: Those we serve around the world have differing needs: some governments want help in developing and marketing their natural gas resources, others need support in creating market infrastructure, partners need a trusted associate who understands their aspirations and adds value, bankers require credit worthiness and security,
buyers seek reliable, flexible and competitively-priced supplies, industries need help in managing their energy needs, householders seek convenience, choice, value and reliability, society expects companies to contribute to economic, social and environmental progress.
Meeting these needs demands a range of capabilities What do I mean by `capabilities'? Assets are important - access to supplies, transportation, markets and customer channels - but not sufficient by themselves.
Capabilities also encompass people's talents, skills, creativity and drive. But they are collective not individual. Skills have to developed, learning applied, creativity encouraged and drive harnessed.
In Shell, we have unique experience of the gas business all over the world. That's exactly where it would stay if we didn't systematically learn from experience and share lessons.
Historically we did this by moving expensive expatriates around the world. Now, the internet and virtual teams give us new ways of learning and sharing - more quickly and at lower cost.
I think there are five key capabilities:
bearing financial risk,
applying technology,
building relationships,
achieving trust, and
innovating constantly.
The costs, complexities and timescales involved in developing gas supplies require deep pockets. After we discovered the Troll field in 1979, it took a further 16 years to bring it into production- to serve European gas customers for 50 years.
Gas from Oman was brought to market more quickly - less than a decade after the reserves were discovered. Being in a financial position to approve the project on the basis of just a single train - although two were built - provided important momentum. In total the partners invested $3.2 billion to bring the project to fruition.
Delivering China's gas infrastructure and supplies will require very substantial investment. The proposed West-East pipeline alone could cost over $5 billion.
National energy companies are very capable. Their international partners must add something extra. Developing the Changbei gas field in China's Ordos basin will test our subsurface capabilities.
Cost efficiency also counts in highly competitive markets and developing economies. Systematic learning from experience has been the basis of continuing cost improvement in many areas, such as LNG plant design.
Oman LNG enjoys the advantage of being the lowest cost greenfield development.
There is no secret about the importance of building relationships - whether with governments, partners or customers. It requires a continuing effort to understand aspirations and meet needs.
It takes long-term commitment. We have been involved in Nigeria for over half a century and started working on an LNG scheme 30 years ago.
It was a difficult journey, but worth it. Nigeria LNG will contribute to the Nigerian people, its gas customers and its partners' businesses for many years to come.
What we sell every day is not just gas, or power, or technological services, or risk management. It's our reputation. We're not in a street-market where customers can prod our produce.
They have to trust us to deliver. Reputation is a vital asset - whether for putting together complex LNG deals or maintaining high environmental standards. Let me touch on the second.
In Shell, we have faced problems. We were more exposed than most, missed changing societal expectations and made mistakes. But we learned and worked to rebuild trust.
A complacent business doesn't long survive. Continued business success requires relentless improvement and constant innovation - whether grasping the new trading opportunities of electronic marketplaces, making innovative LNG deals, or developing new technologies which change the game. We have particular hopes for two such technologies.
Our gas-to-liquids technology - proven at our 15,000 b/d plant in Bintulu Malaysia - converts remote gas resources into competitive ultra-clean products in demand for improving fuel quality.
Operational learning from Bintulu, improvements in catalyst technology and economies of scale allow us to build the next generation gas-to-liquids facility - producing 75,000 b/d and economic at oil prices of $15/bbl.
Shell coal gasification technology - which we plan to apply in China - uses coal resources more cleanly and efficiently.
Something else is needed as well as those five capabilities - the ability to put it all together, make things happen, integrate technologies, deliver complex projects. Doing so requires both knowledge of the whole gas chain - from customer to reservoir - and the ability to contribute throughout.
It requires the judgment that comes only from real experience in different markets as well as the ability and willingness to risk your own money to back that judgment.
Gas has a bright future and will offer many business opportunities. But we should have no delusions here! The difference between markets and diversity of customers will not make it easy - for the industry or individual companies with global aspirations.
There are many new possibilities in open, transparent and on-line markets. But there are also great opportunities in developing markets in emerging economies.
The technical skills to find and deliver the resources will remain essential. So will the ability to maintain that vital asset - a trusted reputation. In Shell, we look forward to the challenge.
Linda Cook, CEO Shell Gas and Power at the 20th CERA Annual Executive Conference, Houston, Texas, USA
Source:SHELL.COM
© 2001 Mena Report (www.menareport.com)
