NEW YORK Royal Dutch Shell Plc is planning to reduce its onshore drill spending in the United States by 20 percent in 2014, but remains bullish on liquids-rich shales, deepwater and heavy oil.
We are taking stock of our investment opportunities and operating positions. ... This approach is driving hard choices on todays asset base, new opportunities and disposal plans, where we have recently announced exits from Australia and Italy downstream, Wheatstone liquefied natural gas (LNG) in Australia and U.S. gas-to-liquids, chief executive officer Ben van Beurden said in a statement.
Onshore investments with the lowest-cost gas acreage and the best integration potential will be favored, The Hague, Netherlands-based Shell said.
The move comes after profitability in the companys upstream Americas segment was crimped by losses in resources plays such as shales in 2013, the company said, but industry analysts cautioned against interpreting Shells action as indicative of a broader trend.
Overall, I havent seen projections of a reduction in spending, so this probably has more to do with what their prospects are rather than whats going on in the industry as a whole, Kurt Minnich, manager of Tulsa, Okla.-based Pipe Logix LLC, told AMM.
Houston-based pipemaker TMK Ipsco recently signed two long-term agreements to supply Shell with seamless and welded oil country tubular goods, line pipe and premium connections for onshore and offshore applications (amm.com, Jan. 22).