By EDUARD GISMATULLIN
Royal Dutch Shell plans to lower spending in the Americas by
a fifth as Europe
s largest oil producer
focuses on more profitable operations.
Its not acceptable that Shell, now
deploying about 36%, or $80 billion of its overall capital in
North America, has been losing money, said CEO Ben van
Shell expects to reduce capital investment in upstream
operations, or exploration and production, in the Americas by
20% this year and North American resource spending by the
same proportion, the company said today in a presentation.
That leaves us with about $10 billion in total for the
upstream Americas and about $4 billion for the shale,
chief financial officer Simon Henry said. Some of that
does include Argentina and Canada. Its not all in
Van Beurden has pledged to shrink spending costs this year
and speed up asset sales, including refineries, after The
Hague-based company issued its first profit warning in a
decade. He also scrapped targets for cash flow, delayed
drilling off Alaska and promised to restructure shale
operations in North America.
Upstream Americas profitability has been impacted by
losses in resources plays such as shales, Shell said
Friday in a statement. The company intends to drive
hard choices on capital allocation for selective growth and
divestment of non- strategic positions.
Unprofitable shale investments added to a 48% drop in
fourth-quarter profit, the Anglo-Dutch company recently said.
Shell reiterates its aim to improve two underperforming
areas, US shale project
s hurt following a rush to
expand, and refining
and fuel sales, Investec
Bank said in a note.
and fuel marketing were
weaker than chemicals, lubricants and biofuel
s, and the company plans to
separate those business operations into distinct units, Shell
Van Beurden plans to dispose of about $15 billion of assets
through 2015. Shell agreed to sell holdings valued at more
than $4.5 billion, including in Australia and Brazil, and is
seeking buyers for stakes in oil and gas fields, as well as
pipeline and fuel-marketing assets from the US to Nigeria.
The company may also exit its $6.3 billion investment in
We had a good start, Van Beurden said. Lets
see whether we need to adjust the number for the
The CEO and Henry indicated in January that first-quarter
profit will be curbed by lower output after the end of a project
in the United Arab
Emirates and caps on Dutch gas output.