| Shell to boost production by 11 % by 2012, plans to cut a further 1,000 jobs |
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16/03/2010 15:48 (698 Day 04:50 minutes ago) | |||||
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The FINANCIAL -- Anglo-Dutch oil major Royal Dutch Shell PLC said it expects output to rise by 11 percent to 3.5 million barrels of oil equivalent a day by 2012. “We are making substantial investments in new projects to drive Shell’s financial performance,” Chief Executive Officer Peter Voser said today in a statement, according to Bloomberg. “We have a tremendous opportunity set for the 2015-2020 timeframe.”
The CEO is seeking to boost output with new projects in Qatar, Malaysia and Brazil, the same source reports. Shell has earmarked net capital spending of $28 billion for 2010 and will spend between $25 billion and $27 billion a year from 2011 until 2014. It replaced 288 percent of its production with new discoveries in 2009.
Shares rose 1.3 percent to euro21.34 in Amsterdam, according to AP. In a statement, Shell said it plans up to $3 billion in annual asset sales in coming years, disposing 15 percent of its refining capacity. "The global refining industry may be in oversupply for some time," Voser said.
Shell announced plans to cut another 1,000 jobs, as it admitted being slow to respond to the global recession, according to Mail Online. The group, which has 100,000 staff worldwide, cut 5,000 posts last year and had already announced 1,000 job losses for this year. Voser said the group would axe a further 1,000 posts by the end of 2011. 'The company had become too complicated and slower to respond than we'd like. So we are sharpening up,' he said.
BBC reports that Voser said Shell had become "too complicated and slower to respond than we'd like". However, the company said it was making substantial investments in new projects and expected to see production increase significantly in the next two years. Last month, the firm reported a sharp fall in profits in the last three months of 2009 due to falling demand for oil from a weak global economy.
Shell said cash flow from operations is expected to increase by about 50 percent from 2009 until 2012, assuming an oil price of $60 a barrel, according to Bloomberg. Shell’s class-A shares rose 1.4 percent to 1,938.5 pence as of 9:20 a.m. in London trading. The stock is up 18 percent in the past year.
Two weeks ago, BP announced plans to increase pretax profitability by $3 billion over the next two to three years by boosting production and making the refining and marketing business more efficient. BP intends to raise average annual oil and gas output by 1 to 2 percent through 2015, the same source reports. Shell’s production fell 3 percent to 3.152 million barrels of oil equivalent a day in 2009 from 3.248 million barrels a day in 2008. The company pumped its first million barrels of oil from the Parque das Conchas project off Brazil’s coast in December, and exceeded targets for shipments of crude oil and LNG from its Sakhalin-2 venture in Russia’s Far East.
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