The divestments mainly included Shell’s 30 per cent interest in Oil Mining Lease 30 (Shell share of production 11 thousand bpd) in the Niger Delta, 50 per cent interest in the Holstein field (Shell share of production 5,000 bpd) in the Gulf of Mexico and interest in the Seal area (Shell share of production 2000 bpd) within the Peace River oil sands of Alberta, Canada.
Shell made this disclosure in its fourth quarter and full year 2012 unaudited results released by the company at the weekend.
Commenting on the result, Shell Chief Executive Officer, Peter Voser, stated: “We are delivering a strategy that others can’t easily repeat, with unique skills in technology and integration and a worldwide set of opportunities for new investment.”
Although the economic outlook remains uncertain for some of Shell’s key markets, Voser said the prospects for long-term growth in global energy demand remained unchanged, driven by rising world population and improving standards of living in developing countries.
“Meeting this demand growth with clean and affordable energy is a formidable challenge for our industry and it is a major opportunity for Shell,” he added.
He confirmed Shell’s growth agenda, which aims to deliver $175-$200 billion of total cash flow from operations for 2012-2015, a net capital spending programme of $120-$130 billion, and a competitive dividend for shareholders.
Shell’s efforts to expand its pipeline of potential energy projects are paying off, said Voser.
“Our drive to increase our options for future projects means that we are more constrained by limits on capital than by limits on opportunities,” he said. “This allows us to prioritise the most attractive opportunities, and reconfigure or exit from less attractive ones.”
Voser further hinted that Shell would continue to maintain its investment programme through the economic cycle.
“We make long-term decisions on capital allocation and growth choices, and we look through short-term market volatility,” he said.
“As our cash flow momentum builds, we expect to increase our dividends for shareholders in measured, affordable steps. There is more to come from Shell,” Voser said.
Shell would continue the strategic drive to grow its upstream businesses, with ongoing selective investment in downstream.
At the end of 2012, the company had 12.4 billion bpd of resources on stream, averaging 3.4 million bpd of production, and 20 billion barrels of oil equivalent, boe, of resources potential in our active development funnel.
Total resources in these two categories represent 26 years of current production. Shell has 30 new projects under construction, which should unlock seven billion barrels of resources, and drive continued financial and production growth.
Upstream start-ups in 2010-15 are expected to add some $15 billion of cash flow in 2015, in a $100 oil price scenario. Some 50 per cent of its 2013 capital investment will contribute to cash flow by 2015.
Oil & gas production is expected to average four million bpd in 2017-2018 compared to 3.3 million bpd in 2012.
Shell’s strategy in upstream is designed to drive financial growth, irrespective of production entitlement, with production growth regarded as a long-term proxy for financial growth.