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Companies & Associations BASF SE
Chemicals giant BASF SE says the shale gas boom currently underway in the U.S. offers the business “an outstanding opportunity” in that market, but its impact on its European operations would be more limited.
Speaking at a meeting with analysts in London to discuss BASF's chemicals activities May 22, Wayne Smith, a member of the company's board, said the development of shale gas was “clearly an outstanding raw material event” and would increase the entrepreneurial environment in the U.S.
Increased production of shale gas would “decouple” crude oil and natural gas prices in America, Smith said, but the company has no plans to ship shale-related products to Europe due to the cost involved.
Earlier this month, BASF had indicated it was looking at a large investment to exploit low-cost shale gas in the U.S., probably on the Gulf of Mexico, following the conversion of an existing cracker at Port Arthur, Texas, to run on ethane.
While shale gas exploitation has the potential to take the U.S. economy by storm, some European governments have been slow to go down this route, following pressure from environmental groups.
In other comments at the meeting, Kurt Bock, BASF's chief executive, said while his company was committed to investing in Europe it not currently see it as a growth region.
Bock criticized politicians in Brussels for dithering over 'growth versus politics', arguing that members of the European Parliament had to make up their minds about priorities.
If they wanted BASF and others to meet tougher carbon targets the firm might have to shrink its activities in order to achieve them. “But then they also want economic growth,” he said. “So they have to decide.”
However Bock said he thought some at the heart of the European Union were “trying to do the right thing”.
The BASF chief said he believed the current crisis in Ukraine would not affect the firm's agri-business in the country and would eventually be “contained”, while partnerships with Russian firms, such as Gazprom, would be unaffected “thanks to dialogue,” he believed.
And while rivals of BASF faced shareholder concerns over strategy, Bock said investors in his business “understood the BASF story.
“We have active shareholders, rather than 'activist' shareholders. We're not perfect, but by being transparent about what we do we can create comfort and confidence for shareholders.”