Royal Dutch Shell will continue its deep-water drilling to meet rising global oil demand, its chief executive said on Sunday, despite safety concerns following rival BP's Gulf of Mexico blowout.
Given the rise in the population and rise in developing world of energy needs, we will have to develop those resources in deep waters as well, so my expectation is that we will go forward with it, but it will need some changes, Peter Voser said during the Fortune Global Forum in Cape Town.
BP's share price has plunged as it struggles to contain the oil gushing out of the ruptured well a mile down in the Gulf of Mexico amid allegations by U.S. lawmakers that it took short cuts on drilling to save time and money.
Voser said Shell would not have drilled the Macondo well in the Gulf of Mexico in the same way as BP did. But he did not elaborate.
We would not have drilled the well in the same way. We have got other safety procedures across the globe. But I think for some companies there will be some learning from this as well, he said.
If I look at what (U.S. Interior Secretary Kenneth) Salazar is now proposing to change in terms of regulations in the United States, I can say this is pretty much in line with our global (safety) standards, said Voser, adding Shell has revamped its safety procedures globally.
We as the oil industry have to come together to actually be better prepared in the future to deal with spills, Voser said.
BP's shares, a staple holding of many U.K. pension funds, have tumbled since the oil crisis started and fell another 6 percent to a 14-year low on Friday as investors worry about the final clean-up and reparation costs.
BP has set up a $20 billion compensation fund and has already forked out $2.3 billion in clean-up and compensation costs.
NIGERIAN OIL SPILLS
Responding to criticism, also raised at the Global Forum, that Shell and other oil majors were not doing enough to clean up oil spills in Nigeria, Voser said the situation in Africa's largest oil producer was complex.
We can contribute in the best way actually by doing our job properly (and) generate revenues for the government, but that has been quite problematic over the last few years because of sabotage and violence (targeting oil companies), Voser said.
He said last year 98 percent of Shell's oil spills in the restive Niger delta, Nigeria's top oil producing region, were caused by sabotage and or theft.
Voser said Shell was obliged under Nigerian law to clean up oil spills but would not jeopardize staff safety to accomplish this.
I will not send people in if they are under threat.
In the Niger Delta, home to Africa's biggest oil and gas industry, oil spills have been left for decades, polluting the air, soil, and water of impoverished communities.
No one knows for sure how much oil has seeped into the rivers and creeks of the Niger Delta, but environmentalists say the impact over time in one of the world's largest wetlands is much worse than in the United States.
(Reporting by Wendell Roelf; Editing by Greg Mahlich and Jon Herskovitz)