Producing oil and gas responsibly and efficiently
The most ambitious scenarios show that as the energy system transitions, the world will continue to need oil and gas for decades. Read about how we are focussing our Upstream activities on fewer, existing positions and on generating value over volume.
Oil and gas production
Oil and gas are vital for many aspects of modern life across the world, from fuelling transport and powering industry to heating homes and lighting schools. Shell’s Upstream business delivers reliable energy from shales, conventional oil and gas, and deep water in an increasingly cost competitive way. The most ambitious scenarios show that even as the energy system transitions, the world will continue to need oil and gas for decades. We are focusing our Upstream portfolio to become more resilient, prioritizing value over volume to provide the energy the world needs today whilst funding the energy system of tomorrow.
We aim to find the right balance between managing our Upstream assets – which will produce the financial returns needed to help us fund the transition – and investing in our Transition and Growth businesses. Furthermore, we are shifting capital from our Upstream business to our Transition and Growth businesses as the energy transition accelerates and we sell more low-carbon energy products. Our oil production peaked in 2019. Excluding impact from the Permian divestment, oil production is expected to decline on average by 1-2% a year until 2030.
We are also seeking to reduce emissions from our facilities which produce natural gas through pursuing operational efficiency in our assets, including reducing our methane emissions.
Deep water operations
Shell has a long history of developing energy projects using its knowledge, experience and proven deep-water technologies to unlock energy resources safely and efficiently. Our global deep-water portfolio represents two core positions in our Upstream business with prolific basins in the US and Brazil, along with an exciting frontier exploration portfolio in Mexico, Suriname, Argentina and West Africa.
Read more about Shell’s deep-water work around the world at www.shell.com/energy-and-innovation/deep-water.
Shell is a responsible and leading operator and applies stringent controls and international best practice guidelines to its operations. Procedures for managing impact from seismic activities are well established and in line with the latest global industry standards.
Offshore seismic surveys are a safe mapping technique for gathering information about whether oil or gas may be present deep below the seabed of a given area using sound waves that are directed downwards. The sound produced during seismic surveys is comparable to many naturally occurring and other man-made ocean sounds, including wind and wave action, rainstorms, marine life, and shipping.
Shell has extensive experience in collecting offshore data from these surveys and we take great care to prevent or minimise impacts on fish, marine mammals and other wildlife. Shell also contributes to joint industry programmes, including the Sound and Marine Life Joint Industry Programme, which is at the forefront of leading research for sound in the marine environment.
In 2021, questions and concerns were raised about Shell’s activities in the ocean off the Wild Coast of South Africa. Shell respects the court decision made on December 28, 2021 in relation to the Wild Coast survey and suspended the survey. We are continuing to review the best way forward for our license in the longer term in support of South Africa’s energy needs.
Read more about Shell’s activities in the ocean off the Wild Coast of South Africa at www.shell.co.za/energy-and-innovation/wild-coast-seismic-survey.
We do not plan to pursue new oil exploration leases offshore in the Arctic Circle. We evaluate other opportunities on a case-by-case basis, in line with our strategic objectives.
Shell ended frontier offshore exploration drilling operations in Alaska in 2015. We hold interests in a small number of exploration licences in Arctic areas of the USA, Norway and Russia. We also hold a number of other licences from our previous activities in the Canadian Arctic, although we do not have plans for further development of these licences.
Shell holds interest in two license areas in the legacy North Slope producing area of Alaska. In December of 2020, Shell received regulatory approval to combine our near-shore leases in West Harrison Bay into a single unit, which we ultimately plan to divest after the exploration phase. Shell is currently seeking a co-owner who will operate the unit. The Nikaitchuq North prospect, in which Shell holds a 50% ownership, is operated by ENI. Future plans are currently under assessment.
We are a leading producer, marketer and trader of liquefied natural gas (LNG). Natural gas, piped and liquefied natural gas, provide lower carbon energy, for example, switching from coal and oil to gas during the energy transition can help cut emissions from generating electricity.
The IEA estimates that global natural gas operations have an average methane leakage rate of 1.7%. At this rate, natural gas emits over its life cycle around 45% lower greenhouse gas emissions than coal when used to generate electricity.
Natural gas can also make a significant contribution to lowering greenhouse gas emissions in industries, such as the iron and steel sector, where switching to natural gas from coal could lead to lower emissions.
Gas also has significant advantages when used to generate power alongside renewables: it can quickly compensate for dips in supply from solar or wind generation and can rapidly respond to surges in demand.
Read more about natural gas at www.shell.com/energy-and-innovation/natural-gas.
We are also seeking to decarbonise our operations through pursuing operational efficiency in our assets, including reducing our methane emissions, and transforming refineries into energy and chemicals parks, so we can sell more low-carbon and sustainable products.
We work to unlock shale resources safely and responsibly through strict adherence to our Onshore Operating Principles of Safety, Air, Water, Footprint and Community.
Read more about our shale oil and gas production at www.shell.com/energy-and-innovation/shale-oil-and-gas.
Explore For More
Scientists studying wildlife habitats and behaviours are helping to shape the future of renewable energy.