Shell has reiterated its “commitment” to the North Sea and West of Shetland, saying there is still “running room” in the region.
Reporting on its second quarter results yesterday, the energy giant spoke of the outlook for the UK sector as it moves to reshape its organisation.
West of Shetland, which holds some of the UK’s largest discoveries, has emerged as a new frontier for oil and gas exploration,
Shell holds stakes in several fields there operated by BP, including Clair, Schiehallion and Alligin.
The energy giant also acquired a 30% stake of the giant Cambo field operated by Siccar Point, which has had its approval delayed due to the current downturn.
CEO Ben van Beurden explained how Shell is reassessing certain projects globally in light of the downturn and its restructuring plan, some of which have been cancelled or deferred.
Asked about the North Sea and West of Shetland on an investor call, he said: “We are still very much committed to that area.
“We will be looking at a project reshape, very much at where are our core assets? Where do we want to focus?
“We see a lot of potential still in the West of Shetland area. Clair, Schiehallion you mentioned, we see further running room there.
“I don’t want to get ahead of myself but I would be surprised if we concluded that wouldn’t be part of our portfolio going forward.”
As part of its cost saving plans, Shell has cut its global exploration budget by $600m, Mr van Beurden said, reducing the number of planned wells this year from 77 down to 22.
Alongside other cost saving measures, including voluntary severance to reduce the workforce and freezing salaries, the firm is “on track” to deliver a $3bn-$4bn cut in operating expenses by the first quarter of next year.
More details on Shell’s reorganisation, and its implications for the workforce, are expected to emerge after the summer, Mr van Beurden said.