Shell questions EU policies on competition

Royal Dutch Shell PLC’s Chief Financial Officer Simon Henry said the firm likely will continue to reduce its investment in countries of the European Union due to long-term concerns over the continent’s policies on competitiveness.

Royal Dutch Shell PLC’s Chief Financial Officer Simon Henry said the firm likely will continue to reduce its investment in countries of the European Union due to long-term concerns over the continent’s policies on competitiveness.

“Fundamentally, we have more of a concern in Europe as a whole about competitiveness,” said Henry. “Europe’s macroeconomic position can only recover, and a sovereign debt crisis can only be addressed, through underlying economic growth, and we do not see the European Union creating the conditions for that, in fact quite the opposite,” he said.

Referring to the EU executive body, Henry said, “Most moves made by the [European] Commission one way or the other tend to almost directly or indirectly reduce competitiveness of European industry, so that is more of a concern to use in the medium and long-term than the sovereign debt crisis.”

Shell, which this week reported net profit doubled largely due to higher oil prices, already has reduced its investment in the EU to 15% of its global portfolio. Most of the firm’s remaining investment is now going into North America, the Middle East, and Asia.

Henry said the 15% figure was likely to decrease even further in the future due to the company's concerns about the EU's medium- and long-term growth prospects.

Henry did not specify which of the EU’s policies were adversely affecting competition, but earlier this week EU Energy Commissioner Gunther Oettinger issued a proposal aimed at bringing offshore drilling and production under closer control by government.

Oettinger noted that while any decision to suspend offshore drilling operations is left to the discretion of member states, the EC repeated its call on the member states “to rigorously apply a precautionary approach in the licensing of new complex oil or gas exploration operations.”

The measure, which has yet to be approved by the EU parliament or any of its member states, was vigorously opposed by Oil & Gas UK, Britain’s industry lobbying group.

“Oil & Gas UK is opposed to blanket EU regulation of this country’s offshore oil and gas industry, which operates under a fully fit for purpose and robust regulatory regime,” said Oil & Gas UK Chief Executive Officer Malcolm Webb (OGJ Online, Oct. 27, 2011).

Contact Eric Watkins at hippalus@yahoo.com.

More in General Interest