Shell considers leaving the Permian shale: press
Royal Dutch Shell is mulling the sale of its assets in the Permian shale basin in a deal that could be valued as high as $10bn, the Reuters news service reported June 14.
Shell produced about 193,000 barrels of oil equivalent/day from the Permian basin last year, down from its average of 250,000 boe/d in 2019. Overall Permian production in May averaged 4.5mn b/d of oil and around 17.5bn ft3/d in natural gas. The shale basin, situated predominately in Texas, is the top oil producer in the continental US and the second-largest gas producer, behind the Haynesville play in northwest Louisiana and eastern Texas.
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Sources familiar with the matter told Reuters that the potential sale aligned with the company’s shift away from fossil fuels. A Hague-based court last month ordered the Dutch company to do more to reduce its emissions. The company aims to increase its spending on renewables and low-carbon technologies to as much as 25% of its total budget by 2025.
Shell's shift away from oil began years ago. In 2015 it acquired UK oil and gas company BG Group for $70bn as part of a shift toward natural gas. The company unveiled a new strategy in February expanding its energy transition plans, forecasting a 1-2% annual decline in its oil output over the coming years.
Reuters reported the consideration does not necessarily mean the sale of its Permian assets is imminent. The Permian basin last year accounted for about 6% of Shell’s production last year. Drawing a profit from the shale basin is difficult, meanwhile, given the degree of drilling necessary to stimulate production.