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Released September 10, 2024 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Media reports indicate that Shell plc (NYSE:SHEL) (London, England) aims to slash its upstream development workforce in a bid to save costs, after already making cuts in its low-carbon business division.
The Reuters news service reported in late August that Shell aims to cut some 20% of its workforce in its exploration and production arm. Much of the jobs could come from the Houston area.
"Shell aims to create more value with less emissions by focusing on performance, discipline and simplification across the business," a statement carried by the news service read. "That includes delivering structural operating cost reductions of $2-3 billion by the end of 2025."
Shell already this year pulled out of the power sector in China as Chief Executive Officer Wael Sawan steered the company toward more profitable operations. Later, the company decided to push the pause button on construction of a biofuels facility in Rotterdam while it assessed current market conditions.
Shell sanctioned work at Rotterdam in 2021. It was slated for 820,000 tons per year, or approximately 5.8 million barrels, of biofuels with a startup date in 2025.
Formerly known as the Pernis refinery, Shell said the facility was expected to be the largest of its kind in Europe. At the time of initial planning in 2021, Shell said a facility that size could avoid some 2.8 million tons of carbon dioxide emissions per year, the same as removing more than 1 million gasoline-powered vehicles from the road.
But lower energy prices are encouraging companies to focus less on new discoveries and developments and more on shareholder returns. Both crude oil and natural gas prices are at historic lows. The price for Brent crude oil, the global benchmark, was trading at around $71.40 per barrel on Monday, down nearly $20 per barrel from year-ago levels.
Shell saw a slight sequential increase in the realized price for both oil and natural gas, though production was lower than first-quarter levels. Its range on production for the third quarter--between 1.6 million and 1.8 million barrels of oil equivalent per day (boe/d)--compared with net production of 1.78 million boe/d during the three months ending June 30.
The company reported profits during the second quarter of $6.3 billion, 19% lower than first-quarter levels, but higher than analysts had expected.
While scaling back in some areas, the company has nevertheless continued its pursuit of natural gas, nearly a decade after buying out British liquefied natural gas behemoth BG Group for $70 billion.
Shell in July opted to pursue a 10% interest in the Ruwais LNG project in Abu Dhabi, which will consist of two liquefaction facilities, or trains, that will have a peak design capacity of 4.8 million metric tons each. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can learn more by viewing the project report.
That same month, it reached a final investment decision on the Manatee gas field project offshore Guyana, near the Venezuelan border. With this development, Shell expects to expand its natural gas supply for Trinidad and Tobago's Atlantic LNG facility. Subscribers can learn more by viewing the related project reports.
All told, Shell expects to expand its LNG business by 20%-30% by 2030, compared to its 2022 production levels.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The Reuters news service reported in late August that Shell aims to cut some 20% of its workforce in its exploration and production arm. Much of the jobs could come from the Houston area.
"Shell aims to create more value with less emissions by focusing on performance, discipline and simplification across the business," a statement carried by the news service read. "That includes delivering structural operating cost reductions of $2-3 billion by the end of 2025."
Shell already this year pulled out of the power sector in China as Chief Executive Officer Wael Sawan steered the company toward more profitable operations. Later, the company decided to push the pause button on construction of a biofuels facility in Rotterdam while it assessed current market conditions.
Shell sanctioned work at Rotterdam in 2021. It was slated for 820,000 tons per year, or approximately 5.8 million barrels, of biofuels with a startup date in 2025.
Formerly known as the Pernis refinery, Shell said the facility was expected to be the largest of its kind in Europe. At the time of initial planning in 2021, Shell said a facility that size could avoid some 2.8 million tons of carbon dioxide emissions per year, the same as removing more than 1 million gasoline-powered vehicles from the road.
But lower energy prices are encouraging companies to focus less on new discoveries and developments and more on shareholder returns. Both crude oil and natural gas prices are at historic lows. The price for Brent crude oil, the global benchmark, was trading at around $71.40 per barrel on Monday, down nearly $20 per barrel from year-ago levels.
Shell saw a slight sequential increase in the realized price for both oil and natural gas, though production was lower than first-quarter levels. Its range on production for the third quarter--between 1.6 million and 1.8 million barrels of oil equivalent per day (boe/d)--compared with net production of 1.78 million boe/d during the three months ending June 30.
The company reported profits during the second quarter of $6.3 billion, 19% lower than first-quarter levels, but higher than analysts had expected.
While scaling back in some areas, the company has nevertheless continued its pursuit of natural gas, nearly a decade after buying out British liquefied natural gas behemoth BG Group for $70 billion.
Shell in July opted to pursue a 10% interest in the Ruwais LNG project in Abu Dhabi, which will consist of two liquefaction facilities, or trains, that will have a peak design capacity of 4.8 million metric tons each. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can learn more by viewing the project report.
That same month, it reached a final investment decision on the Manatee gas field project offshore Guyana, near the Venezuelan border. With this development, Shell expects to expand its natural gas supply for Trinidad and Tobago's Atlantic LNG facility. Subscribers can learn more by viewing the related project reports.
All told, Shell expects to expand its LNG business by 20%-30% by 2030, compared to its 2022 production levels.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
