Shell plans to cut oilfield spending

Royal Dutch Shell Plc (RYSE: RDSA) said on March 13 that it would cut jobs and oilfield spending in the US in light of disappointing returns from several shale oil plays, according to the Houston Business Journal.

In 2013, Shell Oil Co. planned to cut spending in onshore US operations by 20%, eliminate about 400 positions in North America, and sell off some of its assets including a 100,000-acre ranch in South Texas that Shell leased for $1 billion in the Eagle Ford shale play.

In its annual report, Shell noted it lost $900 million on upstream operations in North and South America in 2013, said Fuel Fix. The losses added up to a 48% drop in fourth-quarter profit, the company said in its presentation.

In September 2013, Shell pulled out of an oil shale project in Colorado after 31 years spent on the site and millions of dollars poured into its operations.

Across the pond from the US, The Scotsman has reported that Shell has also effectively put a “for sale” sign over some of its aging North Sea assets after a string of production breakdowns last year. Shell’s North Sea production fell 22% last year, or 26,000 barrels per day.

CFO Simon Henry said the group had some “excellent” energy projects west of Shetland, such as the Schiehallion and Clair fields. But he said that the North Sea represented “valuable production, but high-cost production.”

Henry added that it was important for Shell to decide which more mature assets in the province “justify ongoing investment” and those that might be more valuable to other owners.

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