Shell to cut spending by $15B over three years
Royal Dutch Shell has today said its capital expenditure in 2015 will be lower than that in 2014. The company has said it plans to reduce more than $15 billion of potential spending over the next three years.
The company’s CEO Ben van Beurden said that Shell has options to further reduce spending, but also added: “We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices. Shell is taking structured decisions to balance growth and returns.”
The company’s 4Q earnings, on a current cost of supplies (CCS) basis, were $4.2 billion compared with $2.2 billion for the same quarter a year ago. Full year 2014 CCS earnings were $19.0 billion compared with $16.7 billion in 2013.
Fourth quarter 2014 production was 3,213 thousand boe/d compared with 3,251 thousand boe/d a year ago. Liquids production decreased by 1% and natural gas production decreased by 1% compared with the fourth quarter 2013. Excluding the impact of divestments, Abu Dhabi license expiry, PSC price effects, and security impacts in Nigeria, fourth quarter 2014 production was 7% higher than for the same period last year.
Shell has said that its underlying production was driven by increased high-margin liquids production from both new deep-water projects and improved operational performance. New field start-ups and the continuing ramp-up of existing fields, in particular Mars B, Cardamom and BC10 phase 2 in the Americas, Gumusut Kakap in Malaysia,and Bonga NW in Nigeria contributed some 140 thousand boe/d to production for the fourth quarter 2014, which more than offset the impact of field declines, Shell has said.
Ben van Beurden said: “Our strategy is delivering with good performance on our three themes of financial performance, capital efficiency and project delivery. These will remain Shell’s priorities in 2015, as we continue to balance growth and returns.”
Offshore Energy Today Staff