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Shell Wetselaar says not bullish on near-term gas prices, oil prices at artificial levels

September 16/2020

MOSCOW (MRC) -- The head of Shell's global gas business said on Sept. 7 that he wasn't bullish on natural gas prices in the near term, oil prices were at artificial levels due to suppressed demand and supply, and there was still a difficult time ahead for the global economy due to the coronavirus pandemic, said S&P Global.

"I'm not a near-term bull. Clearly, you know, what happens tomorrow or next week is beyond my forecasting abilities. But I think there is still a difficult economic time ahead," Maarten Wetselaar, Shell's Integrated Gas & New Energies Director & Member of the Executive Committee, said.

"Looking on the oil side the pricing is at the moment rather artificial. There's a lot of suppressed demand and a lot of suppressed supply," he said, adding that it will be some time before the market can really be structurally bullish about energy prices.

Speaking at the opening session of the Gastech Virtual Summit, Wetselaar said getting a vaccine out, that works, to seven billion people has never been done before and will take some time. Because of the uncertainty, Shell was planning for resilience and for the impact of COVID-19 to last for longer. "Not that we want to, but we need to," he said.

Wetselaar denied that there were any regrets about Shell's $53 billion acquisition of BG Group a few years ago, given the growing resistance to fossil fuels and the impact of the pandemic that triggered billions of dollars of asset write downs, saying the deal was done taking into account the cyclical nature of the business.

He was also vocal about growing challenges for energy companies around methane emissions and how many were failing to recognize the challenge this will pose in future. "We've made a lot of progress," Wetselaar said. "Other companies have also signed up to [emissions] targets and are making real progress. [But] in the global gas industry we're not even halfway there."

"If people don't want to attack their methane emissions because they simply don't believe in the urgency, they should get ready for radical transparency because it won't be long before satellites can measure the methane leaks and emissions from operational assets," he said. "And then it doesn't matter what you put in your annual report anymore and the whole world will be able to see what you do. So I do think the industry is not yet at the level of urgency that we want."

As MRC reported earlier Shell will announce a major restructure by the end of the year as the company prepares to accelerate its shift toward its net-zero emissions goal by 2050, said CEO Ben van Beurden to employees. The restructuring will include workforce reductions as part of broader cost-cutting measures, although no figures have been decided yet, the CEO reportedly said during an internal webcast.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry, Shell.
Category:General News
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