Shell will invest between $31bn (£22bn) and $32bn in 2009 to boost its oil and natural-gas production despite the sharp downturn in energy prices that have affected the entire industry.
The global energy company made few investments in the 2007-08 financial cycle to save costs. This pause, the company stated, has given it the means to fund future growth projects.
In a speech reviewing the company’s 2009 investment strategy, Jeroen van der Veer, Royal Dutch Shell’s chief executive, announced that the company’s investment in oil and gas fields gives Shell the capacity to produce one million barrels of oil equivalent per day – enough to generate two to three per cent annual production growth between 2010 and 2012.
The company is currently in the process of making a final investment decision on a drilling project that could add more than one million barrels of oil equivalent per day from an undisclosed resource base that will be active until at least 2020.
Shell has made definitive plans to dramatically increase its natural-gas capabilities. The company plans to boost its production of liquefied natural gas (LNG) in 2009 to 6.5 million tonnes per year – an increase of 40 per cent over 2008 levels.
The company is making cleaner energy a stronger priority and is investing heavily in gas-to-liquid (GTL) production. Shell announced the beginning of construction on the world’s largest GTL plant, Pearl GTL in Qatar, in February.
Shell believes that refining and GTL assets will give it the capability to produce 300,000 barrels per day by 2011-12. This would be a seven per cent increase from the end of 2008.
Other plans for Shell in 2009 include the increased production of ethylene and mono-ethylene glycol to 800,000 tonnes per year and 750,000 tonnes per year respectively.
Van der Veer stated that Shell has not been immune to the global economic crisis, but its 2009 investment plan will help ensure its financial success in the future.
‘These are testing times in the oil and gas industry,’ he said. ‘While short-term measures are important, we keep our long-term perspective and continue to believe that energy needs over the long term provide a positive context for Shell’s investment programmes today.’