Intense competition exists for access to upstream resources and to new downstream markets. But we believe our technology, project-delivery capability and operational excellence will remain key differentiators for our businesses.
In April 2015, Shell announced its recommended combination with BG. This combination was completed on February 15, 2016. This combination should add significant scale and profitability to Shell, particularly in LNG world-wide and deep water oil and gas in Brazil. The combination presents an opportunity to accelerate portfolio refocusing in Shell through asset sales and reduced spending, resulting in a simpler, more focused company.
In Integrated Gas, we focus on liquefying natural gas (LNG) and converting gas to liquids (GTL) so that it can be safely stored and shipped to markets around the world.
In Upstream we focus on exploration for new liquids and natural gas reserves and on developing major new projects where our technology and know-how add value for resource holders.
In Downstream, we focus on turning crude oil into a range of refined products, which are moved and marketed around the world for domestic, industrial and transport use. In addition, we produce and sell petrochemicals for industrial use worldwide.
We focus on a series of strategic themes, each requiring distinctive technologies and risk management:
- Our Downstream businesses in Oil Products and Chemicals are strongly cash-generative with high returns. Shell’s distinctive product offering is underpinned by a strong manufacturing base, and offers growth potential in selective markets, particularly in petrochemicals.
- Shell’s conventional oil and gas business has strong cashflow and returns potential, typically in mature hydrocarbon provinces. We only make investments in selective growth positions and apply Shell’s distinctive technology and operating performance to extend the productive lives of our assets and to enhance their profitability.
- In deep water, Shell has leading positions in the Gulf of Mexico, Brazil, Nigeria and Malaysia. Shell’s deep water activities have significant growth potential from our large undeveloped resource base, and deploying Shell’s technology and capabilities.
- In Integrated Gas, covering LNG world wide, and in GTL in Qatar and Malaysia, Shell has leadership positions in profitable and growing markets. The company is making selective investments in new LNG capacity, and continuing to develop new markets for gas.
- Shell has substantial positions in both heavy oil and oil and gas shales plays. These reserves are in production today, with substantial longer-term growth potential.
- Reflecting the long-term trend to demand growth for lower carbon energy, Shell intends to continue to make substantial investment in large-scale and commercial forms of low-carbon energies and technologies, such as natural gas, carbon capture and storage, biofuels, wind and solar energy.
Our commitment to technology and innovation continues to be at the core of our strategy. As energy projects become more complex and more technically demanding, we believe our engineering expertise will be a deciding factor in the growth of our businesses. Our key strengths include the development and application of technology, the financial and project-management skills that allow us to deliver large field development projects, and the management of integrated value chains.