By Fred Pals
March 15 (Bloomberg) — Royal Dutch Shell Plc, vying with BP Plc to be Europes largest oil and gas ompany, will outline a plan tomorrow to increase output every year until 2020, a person familiar with the companys strategy said.
Chief Executive Officer Peter Voser, due to brief investors at an annual strategy update in London, will say Shell has a pipeline of more than 20 projects with the potential to sustain low single-digit average annual production growth in the second half of the decade, the person said, asking not to be indentified because the presentation hasnt yet been made.
Shell is seeking to revive oil and gas output with projects in Qatar, Malaysia and Brazil after production fell for a seventh consecutive year in 2009. The company, based in The Hague, hasnt previously given annual targets beyond 2012, saying only its reserves will allow it to increase production in the second half of the decade.
Voser has targeted $1 billion in cost savings this year and will cut 1,000 more jobs in an effort to weather the economic slowdown, which has reduced fuel demand in the U.S. and Europe. The Swiss CEO, who succeeded Jeroen van der Veer in July, will reiterate the need to cut costs and indicate capital spending plans beyond 2012, the person familiar with his strategy said.
A spokesman at Shells press office declined to comment on the briefing when contacted by phone today.
Voser will say Shell expects gas-to-liquids and liquefied natural gas projects in Qatar, the BC-10 project in Brazil and Perdido in the Gulf of Mexico to be on schedule, the person said.
Shells production fell 3 percent to 3.152 million barrels of oil equivalent a day in 2009 from 3.248 million barrels a day in 2008. The companys London-traded shares have gained 17 percent in the last year, trailing a 35 percent gain for its closest rival BP Plc.
BP on March 2 announced plans to increase pretax profitability by $3 billion over the next two to three years by boosting production and making the refining and marketing business more efficient. BP intends to raise average annual oil and gas output by 1 to 2 percent through 2015.
Shell has earmarked net capital spending of $28 billion this year, about $8 billion more than BP.
–Editors: Will Kennedy, Stephen Cunningham.
To contact the reporter on this story: Fred Pals in Amsterdam at [email protected]
To contact the editor responsible for this story: Will Kennedy at [email protected]