Shell Sees Longer Period of Low Oil Prices, 20% Capital Investment Cuts

Shell is planning for a longer period of low oil prices and extended uncertainties, adding that the push toward low-carbon energy will be the real game changer of the oil and gas industry.

“For this and next year the International Energy Agency predicts overall demand to be relatively strong. But, again, it looks like the underlying global economic growth will be weaker than expected. So, the first signpost gives a mixed signal” Ben van Beurden, Chief Executive Officer (CEO) at Royal Dutch Shell, said on Tuesday.  

Shell CEO also explained that there are no sings that OPEC’s leading producer Saudi Arabia will change its policy any time soon, contributing to the bearish prospects. Additionally, shale production continues on unexpected levels.

“American shale oil production has so far been more resilient financially and more competitive technically than expected” he said.  

Oil prices plunged over the last 15 months as a result of the oversupply related to new production in North America.

Shell said it is reacting focusing on its balance sheet, reducing operating costs and capital investment.