Exclusive: Shell puts revamped shale arm at heart of future growth
By Ron Bousso
LONDON (Reuters) - Having turned round its North American shale business, Royal Dutch Shell (RDSa.L: Quote) is putting so-called unconventional energy at the heart of its long-term growth plans, and believes lessons from the revamp can be applied across the company.
Greg Guidry, head of the Anglo-Dutch group's unconventionals business, told Reuters a drive to slash costs and streamline decision-making had put his division largely on a par with leading rivals in terms of productivity and efficiency.
And now the rest of Shell could reap the benefits too.
"The executive committee charged us to be a catalyst for change within the broader Shell," Guidry said in an interview.
He also said Shell planned to make small acquisitions near its existing North American shale areas, notably from producers struggling in the current industry downturn, and hoped to launch an early production well this year in Argentina's Vaca Muerta, considered the world's No.2 shale resource after North America.
That's quite a change in fortunes.
As recently as late last year, Shell Chief Executive Ben van Beurden was considering jettisoning the unconventionals business over concerns it would drag down group profitability after the group's $54 billion acquisition of BG Group in February.
Shell and rivals including Chevron (CVX.N: Quote) and Exxon Mobil (XOM.N: Quote) were late to the shale revolution at the end of the last decade and struggled to match the success of smaller independent producers that increased U.S. output by around 4 million barrels per day between 2008 and 2015. Continued...