4th May 2006 07:45
Shell planning to open up some 20 billion boe of resources by the end of thedecadeRoyal Dutch Shell plc updated on its strategy today. Chief Executive Jeroen vander Veer commented "our strategy of `more upstream, profitable downstream' ison track"."Upstream, we are committed to increase our production to 3.8-4.0 millionbarrels of oil equivalent in 2009, and we have record investments for ourfuture in hand. Downstream, we are making selective growth investments, after aperiod dominated by disposals. Competitive cost performance and operationalexcellence are embedded in our strategy. Our downstream businesses shouldgenerate over $1.0 billion of further improvements by the end of this decade.""These are exciting times for Shell. We are making investments and taking finalinvestment decisions by the end of the decade, which together will open up some20 billion barrels of oil equivalent resources. These resources, which arearound one third of our discovered resource base today, include substantiallong-life fields, which will underpin our profitability for many years tocome."He said the company is maturing around 50 major growth projects today, whichshould start up across 2006-09. "Around half are already under construction, inan unprecedented level of activity for Shell. Looking beyond 2009, Shell'sportfolio is robust and growing, and the company is working on a larger numberof further options, which underpin our aspiration for further production growthin the next decade.""We see great potential in unconventional hydrocarbons, in plays such as oilsands and gas-to-liquids. These `unconventionals', and Shell's technology,should help us drive full replacement of our production, on both a resourcesand reserves1 basis, and sustain long term production growth." said van derVeer. Such unconventional resources, however, may not qualify as SEC proved oil& gas reserves, where the company has previously forecast an average 100% SECproved reserves replacement ratio over 2004-08.Van der Veer said "We still have a fair prospect of achieving that target.However, we do not want this target to drive the wrong business decisions,either in the timing of projects, or in the type of resources that weprioritise. The industry is seeing a very tight market for materials andcontract rates. Our requirement for competitive returns means that we willprobably hold back some of our longer-term projects, until the supply andcontracting environment cools down. That in turn makes achieving our SEC provedreserves replacement forecast less likely than it was.""We now see SEC reserves replacement across 2004-08 as an outcome of ourinvestment choices, rather than a forecast. Our goal is to invest in the rightprojects, at the right time, within our framework of capital discipline, " vander Veer said.Chief Financial Officer Peter Voser concluded "we are focused on competitivereturns, disciplined capital allocation, and organic growth. We expect toaverage 20-25% gearing through-cycle, including off balance sheet items.Organic capital spending for 2006 is expected to be around $19 billion, aspreviously indicated, with around $21 billion of spending anticipated in 2007.""Due to continued strength in oil and gas prices, and our capital discipline,we expect to exceed our previous guidance for up to $5 billion of sharebuy-backs in 2006. Share buy-backs will continue, subject to market conditionsand the capital requirements of the group." 1. Reserves meaning SEC proved oil & gas reserves, plus specific hydrocarbon categories that fall outside the SEC's current definitions, for example oil sands and other unconventionals. In such cases we will look to have high levels of confidence in our economic, technical and project maturity estimates. Contact - Investor RelationsUK: Gerard Paulides +44 20 7934 6287Continental Europe: Tjerk Huysinga +31 70 377 3996USA: Harold Hatchett: +1 212 218 3112Contact - Media RelationsUK and International: +44 20 7934 6238/5963/3453/4323/2713The Netherlands: +31 70 377 8750In this document "Shell" is defined as Royal Dutch Shell together with all ofits consolidated subsidiaries. The expressions "Shell", "Group", "Shell Group"and "Royal Dutch Shell" are sometimes used for convenience where references aremade to the Group or Group companies in general. Likewise, the words "we", "us"and "our" are also used to refer to Group companies in general or to those whowork for them. These expressions are also used where no useful purpose isserved by identifying the particular company or companies.This document contains forward-looking statements concerning the financialcondition, results of operations and businesses of Royal Dutch Shell. Allstatements other than statements of historical fact are, or may be deemed tobe, forward-looking statements. Forward-looking statements are statements offuture expectations that are based on management's current expectations andassumptions and involve known and unknown risks and uncertainties that couldcause actual results, performance or events to differ materially from thoseexpressed or implied in these statements. Forward-looking statements include,among other things, statements concerning the potential exposure of Royal DutchShell to market risks and statements expressing management's expectations,beliefs, estimates, forecasts, projections and assumptions. Theseforward-looking statements are identified by their use of terms and phrasessuch as ``anticipate'', ``believe'', ``could'', ``estimate'', ``expect'',``intend'', ``may'', ``plan'', ``objectives'', ``outlook'', ``probably'',``project'', ``will'', ``seek'', ``target'', ``risks'', ``goals'', ``should''and similar terms and phrases. There are a number of factors that could affectthe future operations of Royal Dutch Shell and could cause those results todiffer materially from those expressed in the forward-looking statementsincluded in this Report, including (without limitation): (a) price fluctuationsin crude oil and natural gas; (b) changes in demand for the Group's products;(c) currency fluctuations; (d) drilling and production results; (e) reserveestimates; (f) loss of market and industry competition; (g) environmental andphysical risks; (h) risks associated with the identification of suitablepotential acquisition properties and targets, and successful negotiation andcompletion of such transactions; (i) the risk of doing business in developingcountries and countries subject to international sanctions; (j) legislative,fiscal and regulatory developments including potential litigation andregulatory effects arising from recategorisation of reserves; (k) economic andfinancial market conditions in various countries and regions; (l) politicalrisks, project delay or advancement, approvals and cost estimates; and (m)changes in trading conditions. All forward-looking statements contained in thisdocument are expressly qualified in their entirety by the cautionary statementscontained or referred to in this section. Readers should not place unduereliance on forward-looking statements. Each forward-looking statement speaksonly as of the date of this document, May 4, 2006. Neither Royal Dutch Shellnor any of its subsidiaries undertake any obligation to publicly update orrevise any forward-looking statement as a result of new information, futureevents or other information. In light of these risks, results could differmaterially from those stated, implied or inferred from the forward-lookingstatements contained in this document.Please refer to the Annual Report on Form 20-F for the year ended December 31,2005 for a description of certain important factors, risks and uncertaintiesthat may affect the Company's businesses.Cautionary Note to US Investors:The United States Securities and Exchange Commission (SEC) permits oil and gascompanies, in their filings with the SEC, to disclose only proved reserves thata company has demonstrated by actual production or conclusive formation teststo be economically and legally producible under existing economic and operatingconditions. We use certain terms in this announcement, such as "20 billionbarrels of oil equivalent resources" that the SEC's guidelines strictlyprohibit us from including in filings with the SEC. U.S. Investors are urged toconsider closely the disclosure in our Form 20-F, File No 1-32575 anddisclosure in our Forms 6-K file No 1-32575, available on the SEC's websitewww.sec.gov. You can also obtain these forms from the SEC by calling1-800-SEC-0330.ENDROYAL DUTCH SHELL PLCRelated Shares:
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