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Shell not tempted to hop on M&A bandwagon

  • Märkte: Crude oil, Natural gas
  • 01.02.24

Shell chief executive Wael Sawan said he is not tempted to join a recent upsurge in acquisition activity by fellow major oil companies, insisting his firm will stick with the organic growth strategy it laid out last summer.

"I think the worst thing you can ever do is get FOMO [fear of missing out] when others are acquiring," he told analysts on Shell's fourth-quarter earnings call today.

"We set out a very clear strategy at the middle of last year and, if anything, we stand today in a position where we are very pleased with… the momentum we are building towards that strategy."

Sawan noted that the stability of Shell's operating cash flow generation in the last quarter of 2023 — $12.57bn compared to $12.33bn in the previous three months — was supported by its US Gulf of Mexico business and its Australian gas assets in Queensland producing at record highs. While conceding that there is still more to do at Shell's Prelude floating LNG project off western Australia and at its Monaca petrochemicals business in the US, Sawan said cash flow will be further underpinned by new projects coming on stream last year that will yield a combined 200,000 b/d of oil equivalent at peak production.

Even after the pending disposal of Shell's SPDC subsidiary in Nigeria, the company has "20-plus years of commercial [oil and gas] resources", he said. These are "high-quality barrels" from deepwater and LNG projects, he added.

"For example, Mero-2 that just started up in Brazil at the turn of the year. You have Mero-3 coming through, Mero-4. We have Gato do Mato after that. Vito [in the US Gulf] is up and running and delivering within the first year top-quartile schedule and top-quartile availability. We have Whale coming after that, Sparta coming on top of that, even before you go into the Qatari projects," he said.

"And then, of course, you have LNG Canada, that is also making good progress. And LNG Canada — while it does not have a lot of, if any, bookable reserves — you can imagine how much value that is going to create. So, we continue to be very, very focused on the overall cash flow potential of this company."

Shell's fourth-quarter results came in ahead of analysts' expectations at $7.3bn on an adjusted basis compared with $9.8bn in the same period of 2022, although reported profits for the period were weighed down by heavy impairment charges.


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