VIDEO: Shell 2012 LNG Sales Up 7 Percent, The Netherlands

LNG player Royal Dutch Shell said it has sold 20.20 million tonnes in 2012, up 7% than in 2011, mainly reflecting the successful ramp-up of Qatargas 4 LNG in Qatar and the start-up of Pluto LNG in Australia. Shell sold 5.49 million tonnes of LNG in the fourth quarter, up 13% compared with the same quarter a year ago.

Royal Dutch Shell Chief Executive Officer Peter Voser commented:

Key features of the Fourth quarter 2012:

• Fourth quarter 2012 CCS earnings were $7,294 million, 13% higher than in the same quarter a year ago. Full year 2012 CCS earnings were $27,044 million, 6% lower than in 2011.
• Fourth quarter 2012 CCS earnings excluding identified items were $5,582 million compared with $4,846 million in the fourth quarter 2011, an increase of 15%. Full year 2012 CCS earnings excluding identified items were $25,139 million, 2% higher than in 2011.
• Basic CCS earnings per share increased by 12% versus the same quarter a year ago. Full year 2012 basic CCS earnings per share decreased by 6% compared with 2011.
• Basic CCS earnings per share excluding identified items increased by 14% versus the same quarter a year ago. Full year 2012 basic CCS earnings per share excluding identified items increased by 1% compared with 2011.
• Cash flow from operating activities for the fourth quarter 2012 was $9.9 billion, compared with $6.5 billion in the same quarter last year. Excluding movements in working capital, cash flow from operating activities in the fourth quarter 2012 was $8.9 billion, compared with $7.2 billion in the same quarter last year.
• Full year 2012 cash flow from operating activities was $46.1 billion, compared with $36.8 billion in 2011. Excluding movements in working capital, cash flow from operating activities in 2012 was $42.7 billion, compared with $43.2 billion in 2011.
• Net capital investment for the fourth quarter 2012 was $10.9 billion, bringing the full year 2012 total to $29.8 billion. Capital investment was $12.8 billion for the fourth quarter 2012 and $36.8 billion for the full year. Proceeds from divestments were $1.9 billion for the fourth quarter 2012 and $7.0 billion for the full year.
• Return on average capital employed for 2012 on a reported income basis was 12.7%.
• Gearing was 9.2% at the end of 2012 versus 13.1% at the end of 2011.
• Total dividends distributed in the fourth quarter 2012 were $2.8 billion, of which some $1.1 billion were settled by issuing some 34.2 million Class A shares under the Scrip Dividend Programme for the third quarter 2012. Under our share buyback programme some 13.0 million Class B shares were bought back for cancellation during the quarter for a consideration of $0.5 billion.
• Total dividends distributed in the ull year 2012 were $11.0 billion, of which some $3.6 billion were settled by issuing some 103.8 million Class A shares under the Scrip Dividend Programme. Some 43.7 million Class B shares were bought back for cancellation during 2012 for a consideration of $1.5 billion.
• When final volumes are reported in the 2012 Annual Report and Form 20-F, Shell expects that proved oil and gas reserves additions before taking into account production on an SEC basis will be around 0.5 billion boe.
• With 2012 production of some 1.2 billion boe, our headline proved Reserves Replacement Ratio for the year on an SEC basis is expected to be around 44%. Our Organic Reserves Replacement Ratio, which excludes the impact of oil and gas price movements in the year (mainly due to low gas prices in North America), acquisitions and divestments, is expected to be around 85%.
• At the end of 2012, total proved reserves on an SEC basis are expected to be around 13.6 billion boe, after taking into account 2012 production.
• The 3 year average headline proved Reserves Replacement Ratio on an SEC basis is expected to be around 84%. Our 3 year average Organic Reserves Replacement Ratio, which excludes the impact of oil and gas price movements in the year, acquisitions and divestments, is expected to be around 115%.

Upstream

In Australia, Shell completed the acquisition of Chevron’s 16.7% interest in East Browse and Chevron’s 20% interest in West Browse in exchange for Shell’s 33.3% interest in Clio-Acme and cash.

Also in Australia, Shell acquired an additional 2% interest in the Crux gas and condensate field from Nexus Energy, increasing Shell’s interest to 82%.

Front-end engineering and design contracts were awarded for the 2.5 million tonnes per annum capacity floating LNG facility and the major subsurface production facilities for the development of the Abadi LNG project (Shell share 30%) in Indonesia.

In Malaysia, Shell took the final investment decision for the development of the deep-water oil field Malikai, part of the Block G production-sharing contract (Shell share 35%), offshore Sabah. The Shell-operated project is expected to produce some 60 thousand barrels of oil equivalent per day (“boe/d”) at peak production.

Also in Malaysia, the Shell-operated deep-water Gumusut-Kakap field (Shell share 33%) commenced early oil production via a tie-back of two production wells to the nearby Kikeh production facility. This interim measure is expected to produce some 25 thousand barrels per day of oil until the Gumusut-Kakap floating production system is on stream.

In Qatar, Shell completed the ramp-up of the Pearl GTL project.

In the United Kingdom, Shell agreed to acquire 75% of Hess Corporation’s interests in the Beryl area fields and SAGE infrastructure. This transaction was completed in January 2013, lifting Shell’s production in the Beryl area fields from 9 thousand boe/d to 20 thousand boe/d.

Also in the United Kingdom, Shell agreed to acquire an additional 5.9% interest in the offshore Schiehallion field from Murphy Schiehallion Limited. Following completion of this transaction, expected in 2013, Shell’s interest in the field will be 55%.

Upstream divestment proceeds totalled some $1.7 billion in the fourth quarter 2012. Divestments mainly included Shell’s 30% interest in Oil Mining Lease 30 (Shell share of production 11 thousand boe/d) in the Niger Delta, Shell’s 50% interest in the Holstein field (Shell share of production 5 thousand boe/d) in the Gulf of Mexico and Shell’s interest in the Seal area (Shell share of production 2 thousand boe/d) within the Peace River oil sands of Alberta, Canada.

During the fourth quarter 2012, Shell participated in the Arnhem-1, Pinhoe-1 (Shell share 50%) gas discoveries in the outer Exmouth and the Satyr-4 (Shell share 25%) gas discovery in the Gorgon area offshore Australia and the Zabazaba-3 oil discovery (Shell share 50%) offshore Nigeria. Shell also had successful drilling programmes in liquids-rich shales in North America and coal bed methane in Australia.

As part of its global exploration programme Shell added new acreage positions during the fourth quarter 2012, including the Zitong tight-gas block onshore China, deep-water positions in the Gulf of Mexico and offshore New Zealand. New acreage positions were also added offshore Canada, Colombia and Malaysia, onshore Egypt, Russia and in liquids-rich shales in North America.

Downstream

In Poland, Shell agreed to acquire Neste Oil Corporation’s network of 105 retail sites. The transaction, which is subject to regulatory approvals, is expected to be completed in 2013.

Downstream divestment proceeds totalled some $0.2 billion. Divestments mainly included Shell’s LPG business in Malaysia and the majority of Shell’s shareholding in its downstream businesses in Botswana, Kenya and Namibia.

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LNG World News Staff, January 31, 2013; Image: Shell