Shell to spend $100bn over next four years
16 Mar 2011
London – Buoyed by strong demand fundamentals in world energy markets, Shell is planning to deliver over $100 billion in net capital investments the next four years: earmarking a spend of some $25-$27 billion per year for 2011-14.
Recent investments includes the start up of a new LNG site at Qatargas 4, and the restart of refinery catalytic crackers at the Port Arthur at end-2010 and at Pernis in February 2011. The group is also soon to start-up the Pearl gas-to-liquids facility in Qatar, and significantly upgrade oil sands capacity in Canada.
Shell also plans to drill 25 high potential exploration wells in 2011, and to take final investment decision on some 10 new projects in 2011-12. The latter projects include the Prelude Floating LNG in Australia, debottlenecking of the AOSP project in Canada oil sands, and deep water oil & gas developments at the Cardamon discovery in the Gulf of Mexico and at Malikai in Malaysia.
Shell has now set a new target for 3.7 million boe/d of production for 2014, an increase of some 12% from 2010 levels.
The company has 20 new upstream projects under construction, which will add over 800,000 boe/d, driving the target for 3.5 million boe/d of production for 2012, a 6% increase compared to 2010.
Reviewing 2010 – the first year of a three-year strategic plan – Shell reported some $10 billion, or 40% improvement in operating cashflow to $33 billion, lower costs, higher oil & gas production, and continued progress with downstream restructuring.
New upstream start-ups increased Shell’s 2010 resources on stream to 10 billion boe, a headline increase of 1 billion boe, in a portfolio that produced some 1.2 billion boe in 2010.
New investment decisions, such as Mars B in the Gulf of Mexico, maintained Shell’s resources base for new projects under construction at 11 billion.
The group’s 2010 exploration & appraisal activity added some 2.3 billion boe of new resources, at a competitive cost of less than $2/boe. Discoveries in the Gulf of Mexico and Australia, and successful wells in North America tight gas underpin this 2010 performance.
In 2010, acquisitions and business development added further potential resources, in the US Marcellus tight gas and Eagle Ford liquids-rich shale gas, Iraq oil, and Australia coal bed methane.
Shell has negotiated agreements with three national oil companies in 2010 – in China, Qatar and Saudi Arabia – covering new natural gas potential.
Shell said it believes that its current upstream portfolio can support growth to 2020, with studies underway on over 10 billion boe of resources, an increase of some 2 billion boe from 2009 levels.
Shell is assessing over 30 new projects with production potential of over 1 million boe/d, and maturing further options, spanning activities in tight gas, deep water, LNG and traditional resources.
