Shell has the energy to meet local needs

Thanh Le

As a global group of energy and petrochemicals companies, Shell’s strategy seeks to reinforce its position as an oil and gas industry leader to provide competitive shareholder returns, while helping to meet global energy demands in a responsible way. Thanh Le, country chair and general director of Shell Vietnam, tells VIR’s Song Ngoc about Shell’s global and Vietnam strategies.

Shell globally is focussing more strongly on clean and green energy activities. Can you expand on this?

Our scenario planners think that by 2050, demand could grow three times from its level in 2000, if we keep using energy the way we do today. A big gap could emerge between demand and supply – about the size of the energy industry in 2000. This gap will have to be closed somehow, either by demand being forced down, or supply being ramped up, or some mix of both.  But, exactly how this will be achieved is uncertain. That is why our scenario planners call this a “zone of uncertainty”.  It signals that we are entering a period of major transitions, some of which could be volatile. At Shell, we are working with partners to meet the world’s future energy needs by delivering more energy, cleaner energy and smarter energy.

For more energy, we continue to invest heavily to develop new sources of oil and gas around the world. Shell plans to invest $100 billion over the next four years to support new energy production. At present, we have 20 new projects under construction and are studying over 30 which could be developed by 2020.

For cleaner energy, we are producing more natural gas, the cleanest burning fossil fuel. By 2012, more than half of Shell’s production will be natural gas, and that will grow further. Shell joint ventures will supply more than 30 per cent of the world’s liquefied natural gas (LNG). Our experience unlocking difficult-to-access gas is helping ensure long-term global supply.

With this strategy, Shell aims to be the most innovative and competitive energy company globally.

How will these strategic moves affect Shell’s investment portfolio and activities in Vietnam?

As Vietnam’s energy demand is increasing very fast, our strong portfolio, advanced technology and marketing experience can help Vietnam meet the country’s needs for energy in more responsible, economic and environmental ways.

More power investors in Vietnam are seeking to develop gas-fired power plants instead of coal-fired plants to improve energy efficiency and reduce environmental impacts. Will this offer opportunities for Shell to promote cleaner energy into Vietnam?

Definitely. We believe we can play a role in this move towards cleaner energy by promoting the use of natural gas for power generation. Environmental benefits of natural gas-fired power plants are tangible, substantial and immediate. Coal-fired power growth is responsible for the fastest increase in carbon dioxide emissions worldwide. One-third of carbon dioxide emissions come from power generation. Modern gas-fired power plants emit between 50 and 70 per cent less than coal-fired plants per kilowatt hour of electricity output, and less than one-tenth the sulphur oxides, nitrogen oxides and heavy metals. In addition, gas-fired power plants can be switched on and off with relative ease, making them the ideal allies of the intermittent power of renewable energy sources like wind and solar. So, using natural gas is the cheapest and faster way for countries to meet their growing needs for electricity including Vietnam while curbing their carbon dioxide emissions.

State-run PetroVietnam has just released a list of oil and gas projects for appealing both domestic and foreign investors to join. Which particular ones will Shell be interested in?

Shell is evaluating opportunities to find appropriate ones that fit both parties’ interests and strategies.

Shell announced that it was interested in exploration, import and distribution of LNG in Vietnam and participation in equitisation of Vietnam’s petroleum distribution enterprises. Could you shed some light on this specific plan? 

As indicating by our chief financial officer during his visit to Vietnam in January we are closely working with Vietnamese stakeholders on these interested areas. Regarding fuel distribution, we are still waiting for the Vietnamese government’s policy to open the market to foreign investors. We believe we could bring high quality fuel to serve Vietnam in future.