Shell: From Oil Heavyweight To Gas Giant
A new article in European Energy Review explains how Shell is in the midst of successfully shifting its role from one-time oil heavyweight to gas giant in the wake of depleting crude oil resources and increased access to natural gas resources.
The move stems largely from the corporate shake-up in 2004 when former Shell CEO Jeroen van der Veer took the reigns and steered the company back to a model focused on technology and long-term development.
Over the last decade, Shell has become a world leader in liquid natural gas and has made some major headway in the shale gas sector. The transition to gas is a no brainer for the company because gas falls under what they call “the three A’s”: Acceptable, Affordable and Abundant. Acceptable because it produces the least CO2 of the fossil fuels; affordable because combined-cycle gas turbines are the cheapest form of electricity production by capital cost; and abundant in the sense that global gas reserves are much larger than oil reserves.
Though the strategy shift came before the US shale boom, the European Energy Review says the company couldn’t have been positioned any better to capitalize on what the Globe and Mail has called the “next energy game changer”:
“In many ways the unconventional gas revolution is good news for Shell’s gas-oriented strategy. It makes gas even more abundant, which increases consumers’ confidence in it as a fuel and reduces security of supply concerns. And thanks to the distribution of the tight and shale gas resources, which can not only be found in the US, but also in China, Australia and many places in Europe, the IOCs can once again get access to large resources that are not under the control of NOCs.”
But the shale gas boom isn’t necessarily all positive, the article explains. Markets still aren’t prepared to sell shale gas to the average consumer and international plays – especially in Europe – have to deal with gas strongholds by monopolies such as Russia’s Gazprom who supply much of Europe with gas.
Nevertheless, one thing is for sure: “It should be kept in mind that very soon Shell will not be an oil tanker anymore. It will become a floating LNG vessel.”
Short URL: http://naturalgasforamerica.com/?p=897
Posted by admin
on June 28th, 2010. Filed under Natural Gas.
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