Tags: EU | Netherlands | Shell

Shell to Boost Production, Cut 1,000 More Jobs

Tuesday, 16 Mar 2010 06:44 AM

 

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Oil company Royal Dutch Shell PLC said Tuesday it will boost production by 11 percent by 2012 from 2009 levels, slightly more than previously forecast, and sell assets and cut more jobs.

The targeted output rise, to 3.5 million barrels of oil per day, would reverse a decade of production declines at Europe's largest oil company.

"Although oil companies have been cushioned from the recession by OPEC's action on quotas and oil prices, Shell has been disadvantaged recently, due to our higher exposure to refining," said Chief Executive Peter Voser in a discussion of the company's strategic plans.

He said the company expects oil "to trade typically in a $50-$90 range, and to trend to the upside."

In a statement, Shell said it plans up to $3 billion in annual asset sales in coming years, disposing 15 percent of its refining capacity.

"The global refining industry may be in oversupply for some time," Voser said.

Shell expects up to $27 billion per year in capital expenditures.

It added around 3.4 billion barrels of oil to proven reserves in 2009, and 2.4 billion of new resources, a less rigorous category, "including new barrels in the Gulf of Mexico, North America tight gas, and Australia," Shell said.

"This was the best year for exploration in a decade."

The company announced plans to cut 2,000 jobs before 2012, 1,000 more than previously announced.

In the year ended in December, Shell laid off around 5 percent of its work force of roughly 100,000.

In February, Shell reported a fourth quarter profit of $1.96 billion, reversing a loss of $2.81 billion in the same period of 2008 due to a fall in the value of its inventory.

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