7. Make up your own sentences using the words and word combinations given below.

To build a diamond mine, to channel exploration budget to, to sign a flurry of joint ventures, to make a crucial shift, to mirror recent emphasis on partnerships in diamond marketing and distribution, to shun prospectors, to endear, to shut out of, to come on stream, to operate mines.

8. You opened a small grocery store in a neighbourhood where the majority of the residents are over 65. Most of the neighbourhood lives on low, fixed incomes. Over two thirds don’t have private transportation and must walk to buy their groceries. There are no competing grocery chains because they don’t see a potential for profit in the area. You are considering charging higher than average prices for milk, bread, butter, coffee, and other products your customers buy regularly. What will you do? Is your decision ethical? What are the consequences of your decision?

9. In groups select a small business that looks attractive as a career possibility for you. Make up a dialogue. Talk to at least three people who manage such businesses. Ask them how they started their businesses; ask about financing, personnel training (hiring, firing, training, scheduling), accounting problems, and other managerial matters.

FINANCIAL TIMES OCTOBER 30/31 2004

Shell shake-up fails to fuel optimism

Switch to one board may not help in the vital search for oil, say Ian Bickerton and James Boxell

Standard & Poor’s yesterday put Royal Dutch/Shell’s AA+ credit rating under “negative” review because of the news that it may have to restate its proved reserves yet again.

The credit rating agency said: “This latest warning is the fifth such announcement about its reserves base this year. When Shell’s ratings were last affirmed in July, S&P did not expect further significant adjustments to the reserves base.”

Eric Tanguy, S&P oil analyst, said: “The creditwatch reflects the negative impact that another reserves restatement would have on the company’s business profile.”

Equity analysts also warned that this week’s his­toric decision by Royal Dutch/Shell to scrap its 97-year-old corporate structure would do little to help solve its problem of finding oil.

Bert Siebrand, of Bank Oyens & van Eeghen in the Netherlands, said: “Although we do not underestimate the impact of the unification measures, we do not see how it is going to boost production.”

He complained that the company – in spite of talk of transparency and accountability – had provided “no specific operating details”.

Concerns were also raised about whether Shell tried to bury the bad news on reserves yet again by announcing its restructuring at the same time. “The information was found on page three, line 15 in one of the longest paragraphs I've ever seen,” said one London-based broker.

Jeroen van der Veer, new chief executive at the com­bined group, denied the charge. “We didn’t try to hide the story,” he said. “We are hoping that in our organisation bad news will now travel upwards fast. The only way we can get our rep­utation back is by being open.”

Shell was forced into the restructuring after it was found to have overbooked 23 per cent of its proved reserves this year.

The company had said that the reserves issue was behind it but on Thursday Malcolm Brinded, head of exploration and production, admitted it could be forced to unbook another 900m barrels after rechecking 8bn barrels of its 14.35bn proved reserves.

The company is planning to look again at its remaining reserves. Analysts fear the downward adjustment could end up greater than 1bn barrels and that Shell will not achieve its target of 100 per cent reserve replace­ment over the next five years.

Bert van Hoogenhuyze, of Stroeve, the Dutch stockbroker, said: “After assurances in April about thorough reviews, this sounds like the excuses of school pupils being late for class.”

Richard Rose, at Oriel Securities in London, said: “It’s all very well having one board

but this doesn’t help you find more oil. The way to lift reserves and production is through more capital spending on exploration – although that has long lead times – or to go out and make acquisitions.”

Mr Rose said the single corporate structure would make it possible for Shell to “do what BP has done in the past” by buying companies. But he said: “The question in the current oil price envi­ronment is, what can they go out and buy?”

Shell has been linked to Total – although at one time most people thought the French group was a more likely predator for Shell – and BG Group, which could prove very expensive.

A more likely scenario could be incremental acquisitions of smaller oil groups in the $10bn price bracket. Russia’s Yukos would be tempting, but the probable lawsuits related to any attempt to buy its main oil-producing subsidiary are acting as a deterrent to western oil groups.

While analysts were sceptical about how the new structure would help in the search for oil, investors were more hopeful.

Eric Knight, who represents Knight Vinke, the US asset manager, and Calpers, the US pension fund that has a large Shell holding, said: ‘You now have a chief executive whose problem it is to develop reserves ... With BP for example, the impression one gets is that Lord Browne gets on a plane and goes out to see where investments should be made and just gets on with it. In Shell, everything in the past has been done by committee.”