Shell continues to cut expenditure and sell assets as per...

Shell continues to cut expenditure and sell assets as per article below - just can't see shell being in any position to stump over a billion dollars of cash (i.e. circa their share) for an onshore methanol plant in darwin.

This is is direct contrast (i.e. literally 180 degree opposing view/approach) to ENI who is on the record repeatedly as saying they wish to fast track the development of ES.

just leaves TS with ES parties merely having to agree to sell ES gas directly to TS with TS equity partners bearing the risks re TS capex. sounds like a win-win (and the only option).

still waiting on news re 2 or 3 well barossa drilling results - but can't seem to find any news yet - shouldn't be too far away. barossa/caldita last drilled at 12-14% CO2 which is again way to high for a pure lng play. by way of perspective, Bayu-Undan field, with 500km pipeline to Darwin, is 1% CO2.

Hopefully I am incorrect, but looks like the next asx release from MEO may be the March quarterly which, if so, will probably mean the current quarter is one of the quietest in MEO's history...

adl

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Shell cuts $9bn from capex

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Shell is chopping its capital expenditure this year as it sets its sights on restructuring its unconventionals activities in North America.

The Anglo-Dutch supermajor could make $15 billion of asset sales in the next two years as it looks to rein in its growth ambitions.

"In 2014, we will make hard decisions about our next phase of projects," chief executive Ben van Beurden said in the company's latest strategic report, published on Thursday.

"Capital discipline and potential returns will be critical factors in deciding which to take forward to development."

Shell is cutting its capital expenditure from $46 billion last year to around $37 billion this year as it seeks to "moderate (its) growth ambitions" in order to free up cash flow.

It will be cuttings its upstream Americas spending by one fifth, as it has been impacted by losses in resource plays such as shale.

"Shell is shrinking this portfolio and cost base, with 2014 spending to be reduced by 20% compared to 2013, and redirecting onshore investment to the lowest cost gas acreage with the best integration potential, and into on-going exploration in liquids-rich shales.

"At the same time, profitable growth should continue in deep-water and heavy oil, where an industry-leading development programme is under way."

Shell contined: "From 2014, tight gas and liquids-rich shale will have a different role in our strategy. We now see them as an opportunity for the longer term rather than the immediate future."

The target of $15 billion in non-core asset sales between 2014 and 2015 compares with $16 billion between 2011 and 2013.

"We are reducing the number of these opportunities in our North American portfolio as we strive to improve our financial performance."

The North American upstream and integrated downstream businesses look set for much of the portfolio rationalisation activity. Shell had already said it intended to divest some if its North American tight gas and liquids-rich shale assets.

The supermajor also reaffirmed its commitment to drill in the Alaskan Arctic, despite setbacks in the past two years. The company was already blocked from drilling in the Chukchi Sea off Alaksa after a US Circuit Court ruling went against it.

Shell said this decision raised "obstacles to our plans for drilling offshore Alaska," still insisting that it "decided to suspend" its exploration programme as a result.

"We will look to relevant agencies and the court to resolve their open legal issues as quickly as possible, and review our options in going forward.

"If the legal and regulatory obstacles are sufficiently resolved, the next steps of our exploration programme will be determined by the readiness of our offshore Alaska fleet and the timeline to secure necessary permits."