ROYAL Dutch Shell finance chief Jessica Uhl has hailed a big increase in profitability in the North Sea and underlined the oil and gas giant’s commitment to the area.
As Shell posted a 42% increase in first quarter profits to $5.3bn (£3.8bn) from $3.8bn, helped by the rise in oil and gas prices, Ms Uhl indicated the North Sea has played a big part in the growth story.
“We’re seeing a really fantastic performance from our assets in the North Sea,” she told reporters.
“It’s impressive what the team has been able to accomplish to really transform the return capability and the investment attractiveness.”
READ MORE: Change of tone at oil giant lifts North Sea recovery hopes
Ms Uhl added: “We have made some decisions to expand in the last couple of years and we continue to look at that as an important part of our business. We believe it is more competitive and offers better opportunities.”
Read more: Giant North Sea field development approval boosts industry
The comments from the American executive provide a further sign there has been a big change in thinking about the North Sea at Shell, which will be welcomed in Scotland.
Shell appeared set to turn its back on the North Sea area amid the fall out from the sharp fall in the oil price between 2014 and 2016.
The company shed more than 1,000 North Sea jobs and sold off a raft of older fields. In January last year it sold a big portfolio accounting for around half its North Sea production to the independent Chrysaor for up to $3.8bn.
Read more: $3.8bn deal puts North Sea in focus
The disposals have left Shell focused on newer assets in areas such as West of Shetland, on which it can achieve higher returns using modern kit.
Cost cutting has provided a further boost to profitability.
Shell cheered the North Sea oil and gas industry in January by announcing plans to make hefty investment in revamping the giant Penguins field north of Scotland.
This was the first UK development approved by Shell for more than six years.
In February, chief executive Ben van Beurden said the decision to go ahead with Penguins was an important move for the firm, which saw much more running room in the area.
Read more: Shell reveals North Sea growth plans
He said yesterday Shell’s strong first quarter earnings were underpinned by higher oil and gas prices and the improved profitability of its exploration and production arm.
Ms Uhl noted the first quarter profit was the highest Shell has achieved since the third quarter of 2014, when oil was still selling for $100 per barrel plus.
The company got an average $60.66/bbl in the first quarter against $48.36/bbl in the same period last year.
Ms Uhl reiterated Shell’s intention to return $25 billion or more to investors through share buy backs by the end of 2020. The company held the first quarter dividend at 47 cents per share.
Shell employs around 1,500 people in its North Sea operations including 1100 based in Aberdeen.
In November 2016 Shell said it would close its accounts centre in Glasgow, putting nearly 400 posts at risk. The process is ongoing.
Royal Dutch Shell A shares closed down 26p at 2502.5p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel