Sunday Express: Shell cuts back on forecourts to boost production: “managers hoped the new strategy would draw a line under the reserves-misreporting scandal which triggered the departure of three of Shell's bosses earlier this year.” (ShellNews.net)
By Robin Pagnamenta
22 August 04
SHELL is preparing to unveil a major long-term' business strategy next month which insiders say will result in disposals and acquisitions.
The thrust of the Anglo-Dutch oil giant's plan, to be revealed on September 22, will be to increase the company's focus on long-term on exploration and production while reducing its retail presence, especially in mature markets.
Angus Mcphail, oil analyst at ING Financial Markets in Edinburgh, pointed out Shell had already begun taking steps in this direction. Last week, the group announced the sale of 900 petrol stations in Argentina. In recent months it has also disposed of hundreds of stations in Peru, Spain and Portugal. The cash raised will be used to fund oil and gas field acquisitions in Shell's exploration and production division, the so-called "upstream" end of the business.
"If Shell wants to grow, it is much easier to do this on the upstream than at the retail end," Mcphail said.
In recent years. Shell has been widely criticised for the poor performance of its exploration business, especially when compared with rivals such as BP.
The "reserves replacement ratio" is an indicator of how much oil and gas a firm is discovering compared with the amount it pumps out. In 2003, Shell's ratio was 98 per cent against BP's 175 per cent. Insiders said managers hoped the new strategy would draw a line under the reserves-misreporting scandal which triggered the departure of three of Shell's bosses earlier this year.