SHELL is on track to make significant gains in its production capacity as major projects in Qatar come online. Analysts noted in September that after a decade of declining production, Shell is finally entering a “sweet spot” for production growth.
Oswald Clint, a London based analyst at Bernstein & Co told Bloomberg that Shell has probably got the best portfolio of pre-final investment decision projects around. “And a strategy refocused on the exploration and production business, with plenty of interesting exploration options to add to reserves.”
Shell, which posted second quarter 2010 earnings of US$4.5 billion compared to $2.3 billion in Q2 2009, is spending around $19 billion to build the world’s largest gas to liquids plant in Qatar. Once completed, Shell’s Pearl project will produce 140,000 barrels a day of liquid fuel and 120,000 barrels equivalent of ethane gas and condensate.
The company also has a 30% stake in Qatargas 4, part of the world’s largest liquified natural gas complex, due to start exports next year.
Shell has also signed a new Exploration and Production Sharing Agreement (EPSA) for Qatar Block D with Qatar Petroleum and PetroChina to explore for natural gas in an area of 8089 square kilometres onshore and offshore Qatar over 30 years.
In his second year as chief executive, Peter Voser, in July said that he expects to double cumulative asset sales to as much as $8 billion by the end of 2011.
Voser is assessing more than 35 projects that may add 8 billion barrels of oil equivalent, boosting production until 2020.
Shell expects a 1% production increase from 2009 to 2012, with a forecast of 3.5 million barrels of oil equivalent a day in 2012.
