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    Best of 2016 | Shell Shifts Focus to Brownfields

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Summary

With its purchase of BG taking time to digest in the low oil price world, Shell is wringing more out from old projects

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Top Stories, Asia/Oceania, Best of 2016

Best of 2016 | Shell Shifts Focus to Brownfields

*This article was originally published on October 5, 2016

With its purchase of BG taking time to digest in the low oil price world, Shell is wringing more out from old projects, rather than splurging billions on pioneering hardware.


 

“The new economics of exploration”, wrote Wood Mackenzie’s vice president for exploration research Andrew Latham in mid-September, “mean that rather than pursuing high-cost, high-risk exploration strategies -- elephant-hunting in the Arctic for example -- the majors have become more conscious of costs.” It was a thinly-veiled jibe at Shell’s $7bn exploration campaign off northern Alaska that was called off last year after failing to find oil.

Shell knows about cost overruns in developments too. Its giant Pearl gas-to-liquids venture in Qatar started out at $5bn but ended up in 2011 costing $24bn. Shell has taken risks in the past to develop new, or reshape existing, technology in ways it believed would achieve economies of scale.

The Prelude floating LNG (FLNG) vessel offshore Australia, sanctioned by Shell in 2011 and due to start up next year, dwarfs...

Full article available in Natural Gas World Magazine Issue 4.