Shell released its annual report which set out new production targets at the end of the Q1 as the major oil giant looks to produce 3.7 million barrels of oil equivalent (boe) per day, which is 12 per cent more oil than it did produced last year.
Shell said it was on track to deliver its strategic targets by 2012 which call for a 50 to 80 per cent increase in cash flow from operations between 2009 and 2012, based on a US$60 to US$80 a barrel oil price and an improved downstream and natural gas environment.
Shell also stated that asset sales proceeds exceeded US$30 billion in the last five years and were expected to be up to US$5 billion in 2011.
Chief Executive Officer Peter Voser commented: “We have made good progress in 2010. Our profitability is improving, and we are on track for our growth targets.
The firm also said it had development studies underway covering over 10 billion boe of resources, a rise of some 2 billion boe from 2009 levels, and was assessing over 30 new projects with production potential of over 1 million boe per day.
Voser said its 2014 target was possible because Shell had invested more than US$100 billion on exploration and production in the past five years.
Voser touched on the current volatility in oil prices but saw the unrest in the Middle East region as a short-term issue.
"I look much more beyond the Middle East, and for that matter Japan, to the developments across the world, with a very strong rise in population and average living standards which normally presage a greater oil demand." Voser said.
Shell will look to spend over US$100 billion in net capital investment in 2011-14 which will come with more costs cuts to the company’s downstream arm. Shell set a new target for a further US$1 billion in cost reductions in the next two years, having already cut more than US$2.5 billion in 2009 and 2010.
