Royal Dutch Shell is focused on increasing its U.S. shale production while slowing investment in lower-margin natural gas, says the head of the company’s shale oil operations.
Shell, like Exxon and Chevron, aims to make shale oil production a driver of growth in the next decade, but most of its current output is natural gas, where profit margins are lower, so ~85% of Shell’s shale budget for at least the next two years is planned for new crude oil resources, particularly in the Permian Basin and Canada’s Duvernay Basin, Greg Guidry tells the CERAWeek conference.
Shell has earmarked $2B-$3B/year, ~10% of its total planned capital spending, for shale until 2020; the company aims to raise its total shale production by 200K boe/day to 500K boe/day by 2020, mostly in the U.S.