Shell looks, on the surface, like the most comfortable member of Big Oil. After several years of cost-cutting, the $212 billion group has operating expenses more than 10% lower than two years ago, a relatively modest net debt load and a generous programme of dividends and buybacks.
But analyst work highlighted by Reuters Breakingviews suggests that beneath those tidy numbers sits a long-dated volume problem. On current project plans, Shell’s oil and gas output could slip to around 2.4 million barrels of oil equivalent a day (boe/d) by 2035 – roughly 500,000 boe/d short of its stated ambition to keep production broadly flat. That “output hole” is increasingly shaping how investors and rivals think about Shell’s next strategic moves.
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