Royal Dutch Shell Chief Executive Officer Peter Voser commented:
“Our second quarter 2011 earnings were higher than year-ago levels, driven by increased energy prices and Shell’s operating performance. Shell reinvests its profits to meet customer demand for low cost energy, and to pay attractive returns to shareholders.
In Upstream, our volumes increased by 2% excluding asset sales impacts, driven by new growth projects. In Downstream, maintenance activities and weak industry refining margins masked a resilient performance from Oil Products marketing and Chemicals in the quarter.
Shell’s strategy is on track; performance focus, delivering a new wave of production growth, and maturing the next generation of growth projects for shareholders.
We continue with company-wide initiatives to reduce costs, and to improve our operating performance. Asset sales are a key driver of Shell’s capital efficiency and portfolio enhancement programme. The company has sold some $4 billion of non-core positions in the first half of 2011, in Upstream and Downstream.
2011 is an important year for Shell’s growth programme, and the first half of 2011 saw the successful start-up of three of the largest-scale projects anywhere in our industry today.
In Canada’s oil sands, the successful start-up of the 100 thousand barrels per day (b/d) expansion of the Scotford Upgrader marked the completion of the AOSP Expansion 1 project which will continue to ramp up across 2011.
In Qatar, the Qatargas 4 project, which came on stream during the first quarter 2011, has now fully ramped up, reaching planned capacity of 7.8 million tonnes per annum (mtpa) of LNG. In the second quarter 2011 the new Pearl Gas-To-Liquids (GTL) project in Qatar sold its first GTL gasoil shipment from Train 1.
In total, these three projects are expected to contribute peak production of over 400 thousand barrels of oil equivalent per day (boe/d) for Shell, after some $30 billion of investment, underpinning our targets for financial and production growth to 2012.”
Voser continued: “We have made important progress with new production in 2011, and the ramp-up of our new projects should drive our financial performance in the coming quarters.
Shell continues to mature new projects for medium-term growth.
In Downstream, we have launched the Raízen joint venture, which will be a leading biofuels producer and fuels retailer in Brazil, underscoring Shell’s commitment to sustainable growth.
In Upstream, we have taken final investment decisions on 9 new projects this year, including the 3.6 mtpa Prelude Floating LNG project, in Australia, which is a first for our industry. These investments are part of Shell’s project flow that underpins Shell’s Upstream production targets of 3.7 million boe/d in 2014, and longer-term growth potential.
Shell’s net capital investment for the first half of 2011 was $8 billion, and spending is anticipated to build across the year as new projects move into construction. Net capital spending for 2011-14 is expected to be at least $100 billion, as previously indicated, underlining Shell’s commitment to medium-term growth in new energy supplies.”
Voser concluded: “Investments such as Pearl, Prelude and Raízen are unique in our industry. They are a great testament to our staff and our stakeholders, and reflect Shell’s core strengths. Shell adds value through innovative technology, sustainable growth, integration across value chains to bring value-added products to our customers and partners, and creating long-life returns for shareholders. Our strategy is competitive and innovative.”
