Shell defends continued focus on fossil fuel-paper

FRANKFURT, March 1 (Reuters) - Royal Dutch Shell Plc RDSa.L Chief Executive Peter Voser defended the oil giant's retreat from some green technologies to concentrate on oil and gas production in an interview with the German daily Frankfurter Allgemeine Zeitung.

Shell withdrew from its solar business because it was not prepared to make the required investments, Voser told the newspaper adding that alternative fuel for cars remained problematic.

Voser said Shell was investing between 20 percent and 25 percent of its research budget into biofuels, an area where the company still sees potential.

But Voser cautioned that second generation biofuels will take years before they become viable arriving on markets, “late this decade...if at all.”

Biofuels, hybrid technology and electric cars still faced difficult technological hurdles, and may even cause other problems, the Swiss chief executive said.

“In the next 40 years, the number of vehicles in the world will double,” he said.

Demand, he said, will come mainly from Asia, where many polluting coal fired power stations generate electricity, there could be a step backward from an environmental standpoint.

Voser said he does not expect massive growth for oil demand in the short-term. “Because 2010 is a difficult year for the world economy, particularly the second half, when stimulus measures come to an end,” he said.

“We will probably also continue at a slow pace in to 2011. But in the medium term, global demand for oil and gas will rise.” (Reporting by Edward Taylor, Editing by Leslie Gevirtz)