ROYAL Dutch Shell finance chief Jessica Uhl has said the company is happy with its North Sea portfolio for now after completing a bumper disposal of assets in the area.
As Shell announced that underlying third quarter profits increased by 47 per cent, to $4.1 billion (£3.1bn), from $2.8bn in the same period last year, Ms Uhl said the North Sea remains a heartland for the Anglo-Dutch oil giant.
“We still have over 100,000 barrels per day production there and we have assets that could grow and further opportunities so I would say it remains one of the important pieces in our portfolio and I don’t anticipate any important decisions or announcements in the near term,” Ms Uhl told reporters.
On Wednesday Shell completed the sale of a portolio of assets that accounted for half its North Sea production to oil and gas independent Chrysaor for up to $3.8bn.
The sale formed part of a programme to refocus Shell on assets with the most growth potential, including giant developments West of Shetland. It has reduced its exposure to mature fields in the North Sea.
“I think the UK transaction was a great transaction for Shell and for Chrysaor,” said Ms Uhl. “It didn’t necessarily fit our strategy with the longevity of that asset, we think we can better deploy the capital, so it wasn’t so much a statement on the UK as a statement on those assets. We’re happy with the portfolio that we have now and don’t expect any material changes in the near term.”
Ms Uhl said nothing about the outlook for jobs in Shell’s North Sea operations.
Shell has cut around 1,000 North Sea jobs since 2014 under moves to squeeze significant cost out of the business. Last November the company said it would close its accounts centre in Glasgow, putting nearly 400 posts at risk.
It has around 1,500 people working for it in the North Sea following the transfer of 253 staff to Chrysaor.
Ms Uhl noted that Shell will continue to keep a close focus on costs around the world.
The company’s main priorities include reducing debt and increasing payouts to shareholders.
Ms Uhl said the leadership team is committed to increasing shareholder distributions. Shell may reintroduce share buy backs in the medium term.
BP is set to become the first major to resume buy backs since 2014. Announcing on Tuesday that profits doubled to $1.9bn in the three months to September, BP said it would restart buy backs in the current quarter.
Shell held the third quarter dividend at 47 cents per share.
The results announcements by Shell and BP boosted hopes the industry is in recovery mode following the downturn triggered by the sharp fall in crude prices since 2014.
Ms Uhl said the increase in third quarter profits was partly due to the rise in crude prices during the period.
The company got an average $47.06 per barrel for its crude in the quarter, compared with $40.43 last time.
Brent crude rose above $60/bbl for the first time in two years last Friday, amid expectations major producing nations would extend curbs on production to support prices.
It traded at around $60.40/bbl yesterday afternoon, compared with $115/bbl in June 2014.
Ms Uhl would not predict what would happen to prices but noted the supply curbs agreed by Opec members had held while demand for energy is growing.
Shell’s chief executive Ben van Beurden said its exploration and production arm, integrated gas division and downstream refining and marketing business all performed well in the third quarter.
“This competitive performance is further evidence of Shell’s growing momentum, and strengthens my firm belief that our strategy is working,” said Mr van Beurden.
Analysts had expected Shell to make around $3.6bn underlying profit in the third quarter.
Royal Dutch Shell A shares closed up 74.5p at 2434p.
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