Peter Voser has held the position of Chief Executive of Shell for more than 300 days. In that time, the 51-year-old Swiss national has taken firm control of the energy giant. 7 000 jobs will have disappeared by 2011, the corporate structure has been overhauled and the shareholder dividend policy has been revisited.

Mr Voser moved from his post as Chief Financial Officer to the top position at Shell in mid-2009. As a manager, Peter Voser has the reputation of taking a critical view of Shell’s costs and profitability. But he himself sees no essential break from the policy pursued by his predecessor, Dutchman Jeroen van der Veer.

– While I do have a financial and economic background, I’m just as enthusiastic about technology and innovation. These are the only things that can guarantee long-term survival, but you do need the right cost basis to finance research and development, says Peter Voser.

Mr Voser shows no lack of ambition. The Chief Executive wants Shell to be the most innovative and competitive company in the oil and gas industry.

– It’s true that we partly outsourced technology and expertise at the end of the 1990s. That was a strategic error with hindsight. Over the past five years, Jeroen van der Veer has redressed this by reinforcing the innovation and technology budget. We’re now taking the next step by grouping the Shell personnel involved with this work together under one operational structure, he says.

In the period following the crisis relating to the inflated oil and gas reserves in 2004, Shell’s oil and gas production decreased year-on-year. Daily production fell from 3.9 million barrels in 2003 to 3.1 million barrels in 2009. The Anglo-Dutch company therefore fell well behind major competitors ExxonMobil and BP. Last year, the daily production of these companies was almost 25 per cent higher than that of Shell.

Over the next three years, Mr Voser will continue to work on new production projects set in motion under Jeroen van der Veer. These projects will return Shell’s daily production to 3.5 million barrels in 2012.

For the period after 2012 however, Shell’s Chief Executive is confident that new finds will compensate for the millions of litres of oil and gas that Shell produces every day. Not in the last place because the company is playing catch-up in its acquisition of new licences for oil and gas exploration. According to Mr Voser, Shell is regaining its historical pioneering role in deep-sea production.

– We’re back in the Gulf of Mexico, he says.

Shell has set the target of producing 3.5 million barrels of oil and gas each day in 2012 with the aid of a series of large-scale projects. How important is further growth in your opinion?

– Shell wants to be seen as a company that is growing, so in that sense an increase in oil and gas production is important. But moreover, my emphasis is on profitability, in other words, production growth that contributes to the improvement of the financial cash flow. We will not hunt for an extra barrel of oil or gas if it fails to add value, says Peter Voser.

Do you consider it important for Shell to remain among the top-3 Western oil and gas companies quoted on the stock exchange?

– Advantages of scale are important in our industry. You must have a certain critical mass to invest in the technologically complex projects that Shell has expertise in. With this comes a certain level of production and a global room for manoeuvre. You will otherwise fail to attract the right people and will not be a natural partner for state energy companies. But I don’t necessarily have to be the biggest, although I do want Shell to be the most competitive. We constantly compare ourselves with other large companies. In doing so we look at financial targets like cash flow, not the absolute level of production.

Over the next ten years, Shell feels sure it will be able to develop eight billion barrels in new oil and gas reserves. A relatively small proportion of this is to be found in potentially lucrative deep-sea fields.

Does this situation need to improve further?

– Our deep-sea production is centred mainly in the Gulf of Mexico. Exploration activities there have been very successful over the past twelve months, and we recently made another large find. Our efforts are intensifying in deep-sea areas, but we do not need new deep-sea resources for a diversified portfolio of activities. This is also due to the fact that Shell has secured a considerable number of exploration rights in the Gulf of Mexico in recent years.

So those eight billion barrels that Shell is targeting up to 2020 could rise even further?

– That’s true, this number will increase. More is in the pipeline. For example, in March, a few days before we announced the significant new find in the Gulf of Mexico, Shell acquired exploration rights for blocks located just outside that area. We are delighted with this. Of course, you have to be successful in your exploration activities, but results seen over the past twelve months have been excellent. What is more, outside the Gulf of Mexico, Shell also has deep-sea operations in Nigeria and Malaysia, and opportunities are also arising in Alaska.

A substantial proportion of traditional oil and gas resources are located in countries with less political stability. Are you as Chief Executive paying significant attention to them?

– But of course. This is a key component of our strategy. As far as growth is concerned, it focuses on countries in the Middle East, Russia, Kazakhstan, Nigeria and other countries. But in view of the risks, we do not want to concentrate an inordinate share of our production activities in those areas.

How do you see Russia, the country with the world’s largest gas reserves?

– Russia clearly has the attention of Shell. The Sakhalin project is still the biggest foreign investment in Russia and we are investigating the further development of the LNG activities. Nor is it any secret that Shell is interested in the Yamal region. Last autumn, Prime Minister Putin indicated how Russia wants to proceed in Yamal. If a Dutch trade delegation to the region will proceed this year, it would certainly be of benefit to Shell, en route to a potential partnership.

Shell wants to divest 15 per cent of its refining capacity and restrict the sale of fuel to markets where the company occupies a leading position. What will remain in countries like Sweden, where refining and fuel sales are being divested?

– We want the Shell brand to be present in as many countries as possible, but do not necessarily have to carry out the operations ourselves. Generally speaking there are four options. For example, it is possible to maintain visibility by transferring fuel sales to a party that considers it attractive to carry the Shell brand and that will pay royalties for doing so. That is already the case in the Caribbean and Central-America.

– Another option is that we maintain the Shell livery via agreements with lubricant distributors. Shell can also withdraw from a country completely or only maintain oil and gas production activities there. In Sweden we are engaged in gas exploration in the south of the country, whatever the result of the divestment process will be.

With the emergence of electric vehicles, you anticipate a role for Shell as supplier of natural gas to electricity power plants. Alternative scenarios suggest that natural gas and coal may largely be replaced over the coming decades by wind, solar, hydroelectric and nuclear power.

– Alternative energy forms might well become increasingly popular on a regional level. But if we want to continue to fulfil the demands imposed by a doubling of energy demand on a global scale over the next forty years, the dominant choice for the power sector will still be fossil fuels, including natural gas. Considerable time will pass before wind energy, solar and nuclear energy account for a substantial market share of total energy supplies. The question then will be: do you want coal-based electrification of the transport sector? That discussion has yet to be held in earnest, says Peter Voser.

– In many countries, among which the United States, you already observe a change. Natural gas in the US was recently adopted as a fundamental part of that country’s climate policy. The downside of natural gas used to be that it was not ideal for the security of supply. Considerable growth in the production of tight gas and the development of LNG has put an end to that problem.

And in Europe?

– Things are more difficult in Europe. Gas stocks in Western Europe itself are shrinking. You might hope for a development of unconventional gas similar to that in the United States, but this is not very likely. Europe has no expansive production areas and it will be virtually impossible to acquire sufficient licences. So Europe will have to import natural gas from outside. There is sufficient natural gas in countries like Russia, Qatar, Nigeria and many others, but often it needs further development. Alternative energy may have a role to play, but I have absolutely no doubt about Shell’s strategic choice for natural gas.

Back to the short term: At the beginning of this year, Shell was sceptical about economic recovery in 2010. The recent rise in the price of crude oil to above USD 80 per barrel appears to tell a different story.

– I’m slightly more optimistic about global economic recovery than several months ago. Developments in some industries and some regions, Asia for example, were better than expected during the first quarter. We are also seeing signs of recovery in the US, but Europe is still lagging behind. The price of crude oil is currently influenced by positive expectations regarding recovery of demand and OPEC supply policy. But refinery margins remain under pressure. Shell takes a long-term view and operates on the basis of oil prices of between 50 to 90 dollars a barrel where investment decisions are concerned. This is not connected with short-term prices. These may be either higher or lower, says Peter Voser.