Shell CEO warns that energy shortages could occur in Europe by the end of next month.

Shell CEO Wael Sawan warned on Tuesday that energy shortages in Europe could occur by the end of next month.

Sawan added that Shell is working with governments in order to address the energy crisis. This includes storage and purchasing. Sawan said that the Middle East conflict has already impacted jet fuel supplies. Diesel and gasoline will follow as the summer driving season begins in Northern Hemisphere.

The war has caused major damage to energy facilities, and shipping through the Strait of Hormuz was nearly stopped. This area is responsible for 20% of all global oil and LNG flows.

South Asia took the brunt of it first. This has now spread to Southeast Asia, Northeast Asia, and more recently, Europe, as we move into April.

Katherina Reiche, Germany's Economy minister, warned that if the conflict continued in April and May there could be a shortage of energy.

VENEZUELA

Sawan stated that Shell is looking at natural-gas?projects and oil opportunities in Venezuela.

Sawan stated that the British company could approve one or two Venezuelan projects before the end of the year, if the fiscal and legislative situation in Venezuela allows. Venezuela's National Assembly passed a reform of the oil industry in January. However, oil executives say more must be done to attract foreign investment.

Shell signed preliminary agreements this month with the Venezuelan Government to develop oil-and-gas projects. This could allow the company to access coveted areas.

Five sources familiar with the talks told this month that Shell and Chevron, a U.S. energy company, are closing in on the first major energy production deals for Venezuela.

The 'deals' would allow both companies boost oil and natural gas production in South America, and are the 'biggest step to date towards a $100 billion dollar effort by U.S. president Donald Trump to rebuild Venezuelan oil industry following decades of mismanagement under Maduro, and his predecessor, Hugo Chavez.

Sawan explained that the company is currently looking for ways to?add value' to Venezuela and the Venezuelans. "At first, I'd say that it is more focused on gas and specifically gas that can be monetised through LNG."

Shell has made slow progress in the last few years to develop the Dragon offshore project in Venezuela. The company has struggled with the project due to U.S. sanctions against Venezuela's energy sector. It is now working to get it moving so that the gas can then be converted into LNG in Trinidad and Tobago. (Reporting and writing by Stephanie Kelly in Houston, Liz Hampton and Stephanie Kelly. Editing by David Gregorio.)

(source: Reuters)