Shell’s chief executive Ben van Beurden, speaking at Columbia University’s Center on Global Energy Policy in New York, has said that the company is still very much interested in US oil and gas shales, despite the $2 billion write-down and decision to sell a significant part of its acreage. This is because it was slow to understand the potential of the shale book.
Initially, it had spent $4.7 billion buying acreage in the Marcellus shale and $1 billion in the Eagle Ford before the write-down which was due to additional and perhaps unexpected costs of drilling and development.
“The speed at which we had done it and the volume has been giving us a bit of indigestion to be quite honest… You can be too greedy and too hungry when it comes to looking at opportunities,” he said when explaining the write down, adding that “It’s a different type of game but it’s not best left to the independents. We can play and win at it as well.”
Speaking about China, he said it was not likely that it would experience a shale boom like the US: “There are much less advanced systems, less advanced supply chains, market mechanisms.”
Countires like Russia, Algeria and Argentina have much more potential, he said.
He also believes that although European countries are hoing to use exports from the US to lessen their dependence on Russia, this may not happen for another 5-10 years.