Shell looks to shale production for rapid growth

Baku. 9 January. REPORT.AZ/ The growth of Royal Dutch Shell’s oil and gas operations in the next decade will depend on shale production.

Report informs, the company's chief executive Ben van Beurden told the Financial Times.

van Beurden said that he saw chemicals, electricity and biofuels as key sectors for Shell’s long-term future. But he was also planning for growth in Shell’s traditional core oil and gas production business, focused on shale reserves in the US, Canada and Argentina.

"Depending on how oil prices looked in the 2020s, the company would probably want to keep investing in shale. The strategy aligns Shell with peers ExxonMobil and Chevron, the two largest US oil groups, which are looking to US shale reserves as a principal source of new production", Beurden added.

But Shell says it has cut the cost in the Permian by 35 per cent, and it expects to be generating free cash flow from its shale operations by 2019. Shell expects to double total production of unconventional oil and gas from about 250,000 barrels of oil equivalent a day last year to about 500,000 boe/d by the end of the decade.

Shell has made a series of moves in recent months to strengthen its position in the power industry, with deals to buy Texas electricity group MP2, electric vehicle charging company NewMotion, and UK energy retailer First Utility. “At the moment it’s only 18 per cent but it will be more than 50 by the time this century is over. So we cannot pass up on that opportunity”, he noted.