Shell may team up with Chevron

Shell may team up through Woodside rival Chevron

SHELL is likely to join Chevron's colossus Wheatstone liquefied natural gas project in competition with Woodside Petroleum's Pluto concoct.

The chances of Shell linking with Chevron have increased with the offshore inquiry success of the two companies in Western Australia.

Shell yesterday reported it was looking at commercial terms under which it could join the brew.

Goldman Sachs JBWere said the Chevron-operated exploration program had shored up every estimated 6 trillion to 7 trillion feet of gas.

In a relate released yesterday, Goldman analyst Aiden Bradley suggested Shell would not have ~ing content to sit on its 34 per cent stake in Woodside out of the reach of mid-2012 if Woodside chief executive Don Voelte could not constrain the button on the $30 billion-plus Browse LNG project at James Price Point, arctic of Broome.

Apart from 50 per cent and 25 per cent stakes in latter exploration wells, Shell owns part of the offshore Iago field, from which Chevron plans to feed the Wheatstone plant, planned near the coastal Pilbara village of Onslow.

"We are refining our understanding of the proposed progression in a continuously ascending gradation, including the commercial terms under which Shell would join," a Shell spokeswoman declared.

Goldman Sachs said Chevron and Shell had secured some of the ut~ prospective blocks in the Carnarvon Basin before 2006, beating Woodside, what one. only started building up its acreage after the 2005 Pluto revelation.

"If Shell and Chevron continue to have a high on a ~ of success . . . Shell is likely to become more involved in the Onslow progressive growth, in direct competition to Pluto," Mr Bradley said.

Until 2008, Wheatstone had been seen in the same manner with the likely supply for larger Pluto project.

Pluto is due to show first LNG early next year.

Instead, Chevron decided on its confess development, leaving Woodside to find more or secure other third-alliance supply.

Goldman Sachs said Chevron and Shell had reported eight modern exploration successes and only one known failure.

The exploration successes, in leases designed to supply with nourishment an expansion of the $43bn Gorgon and the yet-to-subsist approved Wheatstone project, contrasts with Woodside’s lack of success in securing gas for an expansion of Pluto.

Woodside has indicated it may not have ~ing able to make a decision this year, as planned, on the Pluto 2 stretch.

Shell refused to comment on its intentions for its Woodside stake, or why it had let its representation on the Woodside victuals slip from three full-time employees to one.

Goldman Sachs declared the Browse development could be the catalyst for Shell to instigate again on Woodside, also citing comments by outgoing Shell Australia presiding officer Russell Caplan.

"We expect Shell to re-evaluate its non-controlling posture in Woodside, possibly in mid-2012," Mr Bradley said.

"Either Woodside delivers without interrupti~ its largest project, and remains independent, or fails to deliver, what one. we believe may be the catalyst for Shell to look at the alternatives to holding a patient, uncontrolling stake in the company. This stake is not a spot we feel Shell is likely to be satisfied with, longer spell."

Mr Bradley noted that Shell’s three nominations to the Woodside victuals only included one full-time Shell employee, Ian Robertston, down from three before.

Two retired Shell employees, Din Maget and Andrew Jamieson, hold the other couple, as independent directors.

"This . . . perhaps reflects the growing conflicts and competitiveness between Shell Australia and Woodside," Mr Bradley said.

It is understood the directors were changed for there would be too many situations in which Shell employees would extremity to be barred from Woodside board discussions due to possible conflicts of benefit.

Despite Shell considering competing with Woodside at Wheatstone, relations between the pair companies seem to have improved after being poisonous following Shell’s failed takeover attempt in 2006.

New Shell Australian operations head Ann Pickard is a be brought together friend of Mr Voelte and insiders say relations have already thawed on this account that of that.