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Shell to ramp up oil production by 2014

Shell to ramp up oil production by 2014
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First Published: Tue, Mar 15 2011. 02 59 PM IST
Updated: Tue, Mar 15 2011. 02 59 PM IST
Amsterdam/London: Royal Dutch Shell aims to produce 12% more oil by 2014 than it did last year and is assessing some 30 new projects, promising the highest production growth rates in the sector.
Shell said it was targeting 3.7 million oil-equivalent barrels (boe) per day of production for 2014 and expected over $100 billion of net capital investment for the period 2011-14, despite price volatility caused by unrest in the Arab world.
“We have made good progress in 2010. Our profitability is improving, and we are on track for our growth targets. There is more to come from Shell,” chief executive Peter Voser said on Tuesday in a statement on the group’s strategic plans.
Depite Voser’s bullishness, Shell shares fell 1.2% to 2,095 pence in London at 0851 GMT, slightly outperforming the FTSE 100 index, which dropped by 1.6%.
Shell said it had studies underway on over 10 billion boe of resources, a rise of some 2 billion boe from 2009 levels, and was assessing over 30 new projects with production potential of over 1 million boe per day.
In its downstream arm, where Shell’s profitability has been hit, the oil major set a new target for a further $1 billion in cost reductions for the period 2011 to 2012. Shell also said it was on track to deliver its strategic targets by 2012. These call for a 50% to 80% increase in cash flow from operations between 2009 and 2012, based on a $60 to $80 oil price and an improved downstream and natural gas environment.
It added that asset sales proceeds exceeded $30 billion in the last five years and were expected to be up to $5 billion in 2011.
Shell has invested more than $100 billion in exploration and production over the past five years. The turmoil in the oil market, fuelled by upheaval in the Middle East, has intensified pressure on the oil major to spell out its long-term plan.
US oil group Chevron Corp said on Monday it is investing 20% more this year, at $26 billion, but is shrinking its refining and marketing arm, where it expects margins to stay soft this year.
Last week the world’s largest publicly traded oil company, Exxon Mobil Corp, said it planned to add 1.4 million boe of production per day by 2016. Its annual budget will range from $33 billion to $37 billion.
In February, BP, still reeling from the financial fallout of the Gulf of Mexico oil spill, said it would increase significantly its investment in exploration and would seek new partnership opportunities.
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First Published: Tue, Mar 15 2011. 02 59 PM IST