Arab Today, arab today shell puts revamped shale arm at heart of growth drive
Last Updated : GMT 15:07:00
Arab Today, arab today
Arab Today, arab today

Head of the Anglo-Dutch group Greg Guidry

Shell puts revamped shale arm at heart of growth drive

Arab Today, arab today

Arab Today, arab today Shell puts revamped shale arm at heart of growth drive

Shell puts revamped shale arm at heart of growth drive
London - Arab Today

Having turned round its North American shale business, Royal Dutch Shell is putting so-called unconventional energy at the heart of its growth plans, and believes lessons from the revamp can be applied across the company.

Greg Guidry, head of the Anglo-Dutch group’s unconventionals business, said a drive to slash costs and streamline decision-making had put his division largely on a par with leading rivals in terms of productivity and efficiency.
And now the rest of Shell could reap the benefits too.
“The executive committee charged us to be a catalyst for change within the broader Shell,” Guidry said in an interview.
He also said Shell planned to make small acquisitions near its existing North American shale areas, notably from producers struggling in the current industry downturn, and hoped to launch an early production well this year in Argentina’s Vaca Muerta, considered the world’s No.2 shale resource after North America.
That’s quite a change in fortunes.
As recently as late last year, Shell CEO Ben van Beurden was considering jettisoning the unconventionals business over concerns it would drag down group profitability after the group’s $54 billion acquisition of BG Group in February.
Shell and rivals including Chevron and Exxon Mobil were late to the shale revolution at the end of the last decade and struggled to match the success of smaller independent producers that increased US output by around 4 million barrels per day between 2008 and 2015.
Oil majors’ often cautious pace in complex, high-risk projects was ill-suited to the nimble needs of shale, which requires drilling hundreds of wells and injecting water at high pressure to break the rock that holds oil and gas.
So Shell moved to adapt.
In recent years, it has shed half of its North American unconventional assets for around $4 billion to focus on four areas in the United States and Canada.
It has cut its technical check-list for drilling shale wells from 20,000 requirements to less than 200 and given managers “end-to-end” control of the production process from well exploration through to well abandonment, Guidry said.
The division’s efficiency has risen by 50 percent over the past three years, production has grown by 35 percent and capital spending is down by 60 percent to around $2.0-$2.5 billion.

‘SWEET SPOTS’
Today, Shell makes a profit from shale oil production in “sweet spots” in the Permian or Duvernay in Canada with crude prices of $40 a barrel, Guidry said. After dipping below $30 in January, Brent crude is currently trading around $48.
“In terms of execution, we are completely competitive and have aspirations to be leading,” Guidry said, adding the business could now compete with leading shale producers such as Pioneer Natural Resources and EOG Resources, though costs still could be reduced.
Advances in technology meant there was scope to increase oil recovery from shale rock from today’s 7-9 percent by another 1-3 percent over the coming years, Guidry added.
“That is billions of barrels. We absolutely can reach that,” the 55-year-old American said.
And unlike multi-billion deepwater projects, shale can be turned on “with the drop of a hat,” Guidry said.
At around 300,000 barrels per day, shale today represents around 8 percent of Shell’s overall production. However, Shell holds shale reserves of around 12 billion barrels, roughly as much as its deepwater resources, Guidry said.

‘ADDITIONAL VALUE’
The shale business got its reward earlier this month when Van Beurden identified it as a key growth priority for Shell in the next decade along with renewable energy.
What’s more, Shell engineers are now using the experience in the shale business to improve deepwater projects, which helped knock out $1.5 billion in costs for the development of the Stones field in the Gulf of Mexico.
As oil producers scrap costly and complex projects such as deepwater fields and sharply reduce budgets in the face of the oil price downturn, they are turning again to onshore shale which offers quicker returns and lower investments.
Some analysts, including at Bernstein, still argue Shell should divest the shale business to focus on core strengths such as deepwater and liquefied natural gas (LNG), which are generating larger profits.
“Surely private equity would have offered some healthy cash proceeds for this business today,” said Bernstein analyst Oswald Clint, who rates Shell shares “outperform.”
But analysts at US investment bank Tudor Pickering, Halt and Co. see growing value in Shell’s unconventional portfolio, particularly in the Permian basin, which they value at $13 billion if oil hits $75 a barrel.
“We believe Shell’s North American unconventional portfolio is less core relative to global deepwater and LNG but we do see additional value that should command a premium multiple when compared to its European supermajor peers,” they said.

Source: Arab News

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today shell puts revamped shale arm at heart of growth drive Arab Today, arab today shell puts revamped shale arm at heart of growth drive

 



Arab Today, arab today
Arab Today, arab today Fadi explains secrets of  Nancy Ajram's newlook

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook
Arab Today, arab today Tourist guide explains types of tourism

GMT 18:28 2017 Saturday ,25 February

Tourist guide explains types of tourism
Arab Today, arab today Expresses Algerian history by woody figures

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures
Arab Today, arab today Iran complying with nuclear deal

GMT 07:14 2017 Saturday ,25 February

Iran complying with nuclear deal
Arab Today, arab today Ayat Abaza says state TV presented major stars

GMT 03:52 2017 Sunday ,26 February

Ayat Abaza says state TV presented major stars

GMT 10:34 2017 Tuesday ,21 February

Brazil graft scandal to mushroom abroad

GMT 11:45 2017 Monday ,20 February

Abu Dhabi Aviation looks forward

GMT 06:28 2017 Saturday ,18 February

Gives priority to security over elections

GMT 22:38 2017 Friday ,17 February

Investment promotion would be Sahar Nasr's main task

GMT 13:17 2017 Wednesday ,15 February

Yemeni accuses militias of challenging oil

GMT 09:12 2017 Saturday ,11 February

Algorithms: the managers of our digital lives
View News in Arabic - Business: حوارات وتقارير
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Ola Ghanem hopes to work with M.Ramadan

GMT 07:23 2017 Friday ,24 February

Ola Ghanem hopes to work with M.Ramadan
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 06:08 2017 Thursday ,23 February

Actress Lobna Abdel Aziz proud of her career

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 20:33 2017 Friday ,17 February

To release new antiques collection

GMT 10:20 2017 Thursday ,23 February

Brazil's top diplomat resigns

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday