Unit 7 shell shake-up fails to fuel optimism

1. Pronounce the following words and word combinations. Use a dictionary if necessary.

Vital, reserve, announcement, adjustment, profile, to underestimate, equity, unification, the Netherlands, transparency, accountability, to bury, to deny, upwards, barrel, thorough, predator, incremental, deterrent, committee.

2. Give Russian equivalents to the following words and word combinations.

To restate reserves, credit rating agency, further significant adjustments to the reserves base, to scrap corporate structure, to underestimate the impact of unification measures, to boost production, to bury the bad news, to deny the charge, to get smb’s reputation back, predator, incremental acquisitions, to act as a deterrent.

3. Read the text again and answer the following questions.

1. Why doesn’t switch to one board help in the vital search for oil?

2. What did Standard & Poor’s put Royal Dutch/Shell’s AA+ credit rating under “negative review”?

3. Why would another reserves restatement have a negative impact on the company’s business profile?

4. Did the company provide specific operating details how the restructuring would contribute to boost production?

5. What concerns were raised?

6. What does Jeroen van der Veer think about the charge?

7. Why was Shell forced into the restructuring?

8. What do analysts fear?

9. What could a more likely scenario for Shell be?

10. What is acting as a deterrent to western oil groups?

11. What is Eric Knight’s opinion?

4. Complete the sentences with the information taken from the text.

1. Shell could be forced to … another 900m barrels after rechecking 8bn barrels of its 14.35bn proved reserves.

2. When Shell was accused of burying the bad news on reserves by announcing its restructuring at the same time, Jeroen van der Veer, new chief executive at the combined group, … the … .

3. Shell’s likely scenario could be … acquisitions of smaller oil groups in the $10bn price bracket.

4. The French group was a more likely … for Shell – and BG Group, which could prove very expensive.

5. The probable … related to any attempt to buy its main oil producing subsidiary are acting as a … to western oil groups.

6. Analysts fear the downward … could end up greater than 1bn barrels.

7. In spite of talk of transparency and … Shell had provided “no specific operating details”.

8. Bank Oyens & van Eeghen in the Netherlands doesn’t underestimate the impact of … ….

5. Explain the following English words and word combinations in your own words.

To scrap corporate structure, to underestimate the impact of unification measures, to bury the bad news, to hide the story, to deny the charge, to get smb’s reputation back, predator, to act as a deterrent.

6. Decide which of the following statements are right and which are wrong. Give the correct variants.

1. This week’s historic decision by Royal Dutch/Shell to scrap its 97-year-old corporate structure will do much to boost its production.

2. The company is planning to look again at its remaining reserves.

3. The way to lift reserves and production through more capital spending on exploration is the most efficient.

4. Analysts fear the upward adjustment could end up greater than 2bn barrels.

5. Jeroen van der Veer said that they hadn’t tried to hide the story.

6. Malcolm Brinded admitted that the company could be forced to overbook another 900m barrels after restructuring.

7. Shell will achieve its target of 100 per cent reserve replacement over the next seven years.

8. Russia’s Yukos would be tempting in buying smaller oil groups in the $10bn price bracket.