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Malcolm Brinded, Credit Suisse 2009 London Oil & Gas conference, 2 June 2009
Shell is rejuvenating its upstream portfolio with 1 million barrels of upstream production and about 4 million tonnes per annum of LNG capacity under construction.
Mr. Brinded pointed out that he saw some inflationary costs pressures easing in the beginning of 2009 and that Shell is taking the opportunity to get better pricing from service providers and better levels of service. He also referred to the new organisation announced by Shell with a simpler organisation structure with more focussed accountability, creating a better platform for strategic delivery and lower costs
He then went on to highlight Shell’s focus on operational excellence in the Upstream, with improved reliability in operated facilities since 2005 leading to a 75,000 boe/d production gain. At Ormen Lange, where Shell is the operator owning 17%, he highlighted the very high reliability of the facilities and the expectation that peak production of the project of 420 kboe/d should be reached by the end of this year.
He highlighted Shell’s large portfolio of new projects with attractive project economics. LNG growth is continuing with a successful start-up of Sakhalin that, contrary to other start-ups in recent years, had no unplanned downtime in the first month of LNG start-up and is showing very good ramp-up performance. Two new Deepwater projects are nearing completion with BC-10 in Brazil starting up this year and Perdido at the Gulf of Mexico starting up early 2010.
Mr. Brinded then went on to highlight various parts of Shell’s future options that can support upstream growth to 2020, without further exploration success or acquisitions. Shell’s positions in North American Tight Gas and Australian LNG were presented in more detail.
In conclusion Mr. Brinded repeated Shell’s strategy, aimed at rebuilding Upstream strength. In the current difficult financial environment Shell is managing that with good operating performance and flexibility on the balance sheet. The foundations that Shell has put in place for the future look good.