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Shell to Quit Up to 10 Countries, Sell 10% of Oil and Gas Assets

Shell service station

Royal Dutch Shell announced this morning that it could be vacating up to 10 countries this year, as it moves to divest up to 10 percent of its oil and gas assets and save around US$4.5 billion.

Shell said in a statement that up to 10 percent of its oil and gas production were tagged for disposal, and planned to exit five to ten countries—a plan that would unfold over the course of the next two years.

The savings plan represents US$1 billion more than previously discussed.

Related: Oil Prices Stimulated By Fed’s Inaction

Shell also plans to trim capital expenditure this year by US$1 billion to US$29 billion, while pressure mounts as net debt rises to nearly US$70 billion, according to the Wall Street Journal.

The supermajor recently completed its US$92-billion takeover of BG Group to give the company strength in the LNG market.

According to a statement, the company sustained an 89-percent drop in profit in the first quarter of this year due to the drop in crude prices. The company anticipates cutting 12,500 jobs. Those cuts are coming as a result of the takeover, and due to the decline in oil prices.

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Shell said that while it will plans to vacate ten countries, it is turning its attention to natural gas in Australia, and to shale in the U.S.

CEO Ben van Beurden said the moves were necessary due to the “high volatility” of the energy market, and low carbon advances.

Van Beurden also said that the company is anticipating a “robust demand” for oil and gas in the coming decades along with a global shift to “lower carbon fuels”.

By Lincoln Brown for Oilprice.com

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