ABU DHABI (Reuters) - Royal Dutch Shell RDSa.L will not increase its target to sell $15 billion of assets in 2014-2015 in the face of lower oil prices, the oil company’s upstream director said on Tuesday.
The Anglo-Dutch major will also maintain its current oil and gas exploration portfolio, Andrew Brown said.
Global oil prices have dropped by around 30 percent over the past four months to about $80 a barrel LCOc1, putting pressure on the balance sheets of oil companies already scrambling to cut spending to boost cash flows and profits.
“We do have a continuous need to recycle our portfolio. Fifteen billion (dollars) is still only a few percent of our total assets and we haven’t got any plans to refresh that target,” Brown told reporters.
Shell has so far sold $12 billion of assets this year, putting it on track to hit the target of $15 billion by the end of next year.
The decline in oil prices has also raised questions over the viability of some exploration projects in recent weeks. But Shell’s exploration portfolio remains on track, Brown said.
“We test all our projects between $70-$110 a barrel, so the current oil price is in the range of oil prices that we test our projects, so this is business as usual in terms of evaluation of project robustness.”
The sharp drop in oil prices is set to hit oil majors’ results in the fourth quarter, after it had only a limited impact in the third quarter when oil prices averaged above $100 a barrel.
Shell shares were down about 1.6 percent at 2199.5 pence by 0805 EDT in London.
Writing by Ron Bousso; editing by Jason Neely and Pravin Char