According to local reports, Shell has cancelled plans to develop its Arrow LNG project in Queensland, Australia.
Shell’s Global Chief Executive, Ben van Beurden, is reported to have confirmed that the coal bed methane to LNG project, under development with PetroChina, is “off the table”, following the recent fall in oil prices.
The news follows Shell’s decision to cut global spending by US$15 billion, which will be spread over three years.
Presenting the company’s full year 2014 results, Mr Van Beurden said that Shell had “delivered where it counts in 2014.”
Shell’s profits for the last three months of 2014 had risen to US$4.2 billion compared with US$2.2 billion in the corresponding period of 2013.
Van Beurden continued: “We set out an agenda in 2014 to balance growth and returns in Shell, and our results in 2014 show that this strategy is impactful where it matters: at the bottom line. By successfully delivering against our three key priorities of better financial performance, enhanced capital efficiency and continued strong project delivery, we are improving Shell’s competitive position in the oil and gas industry.
“Our strategy is delivering, but we’re not complacent. Weaker oil prices underline that there’s a lot more to do. The three themes of financial performance, capital efficiency and project delivery will remain as Shell’s priorities in 2015.”
Shell expects to see further ramp-up of the new fields it brought online last year throughout 2015. The company emphasised that it continues to invest in a competitive suite of new oil and gas fields and LNG, with the next wave of significant start-ups in the 2016 – 2018 timeframe.
Van Beurden added: “The agenda we set out in early 2014 to balance growth and returns has positioned us well for the current oil market downturn. However, lower oil prices and the impact of our 2014 divestments will likely reduce this year’s cash flow.
“We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices. Shell is taking structured decisions to balance growth and returns.”
Adapted from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/liquefaction/30012015/shell-drops-arrow-lng-project-149/