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Set to deliver growth
Shell’s 2010 strategy update: Investing in downstream scale and complexity.
It is six years since Royal Dutch Shell plc (Shell) set out a strategy promising to rejuvenate its up- and downstream assets. Early in this period, Shell committed to substantial investments, including the $18–19 billion integrated up- and downstream Pearl gas to liquids (GTL) plant in Qatar and increasing the scale and complexity of selected refining and chemical businesses, such as the Port Arthur refinery in the USA and the Shell Eastern Petrochemicals Complex (SEPC) project in Singapore.
In the next couple of years, all three of these projects will be on-stream and turning capital expenditure into cash flow. This work, coupled with recent exploration efforts that have helped to deliver a total proved reserves-to-production ratio of around 12 years, prompted the Financial Times to report that the “strategy is about to pay off” and that “Shell is likely to be the fastest growing of all the big oil companies in terms of production volumes.”
However, both the newspaper and Shell Group Chief Executive Officer Peter Voser note that the downturn and overcapacity in the cyclical downstream refining sector made 2009 a challenging year.