Shell today updated shareholders on progress against its strategic plan to generate profitable growth.
In today’s volatile economic environment, the company’s strategic aim remains to drive forward with its investment programme, to deliver sustainable growth and provide competitive returns to shareholders.
Key highlights:
Economic development in non-OECD countries is driving sustained and long term demand growth for all forms of energy. Regulatory and political uncertainties, combined with challenges in debt markets, are adding to price and cost volatility in this long term trend. Shell is investing for sustainable growth through what is likely to remain a highly volatile period in the economy and energy markets. The company’s activities provide affordable, safe and reliable energy supplies for our customers, world-wide.
Delivering on targets to 2012
Shell’s three-year strategic plan, first outlined in early 2010, was designed to build the foundations for profitable growth for shareholders, by improving near-term competitive performance, and delivering growth to 2012. The main strategic drivers of this plan have now been achieved:
Shell’s oil and gas resources base on stream has increased by 33%, or 3 billion boe, to 12 billion boe between 2009 and 2011. Maintaining a strong project flow, the company is maturing a further 20 billion boe of new resources for future growth.
Their headline proved Reserves Replacement Ratio for the year on an SEC basis is expected to be around 100%. Shell’s Organic Reserves Replacement Ratio, which excludes the impact of oil price movements in the year, acquisitions and divestments, is expected to be around 120%.
Shell’s CEO Peter Voser commented: “ Shell’s strategy is innovative and competitive. Our improving financial position creates an opportunity to increase both our dividends and investment levels. With ramp up now well in hand for near-term growth, I want to move our agenda forward today, with new targets for the company .”
“ We are delivering our growth plans. Today’s update sets a new and sustainable growth agenda for the company. We declared over $10 billion of dividends in 2011 and we are expecting to return to dividend growth for 2012. This reflects our confidence that there is more to come from Shell . ”
Setting out new priorities
Voser commented: “ We have worked hard to generate a strong pipeline of investment opportunities for Shell, and we put the emphasis firmly on a competitive financial performance. Shell’s investment programmes create cashflow growth, which in turn funds our dividends. All of this is supported by efficiency gains from our continuous improvement programmes, where the opportunity set runs to billions of dollars for Shel l.”
Growth investment
The key investment themes that underpin this profitable growth include over 60 new projects and options, which should unlock oil & gas resources potential of over 20 billion boe.
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LNG World News Staff, February 2, 2012