Reuters has reported that oil and lubricant producer Shell is considering selling a portion or all of its assets in the Permian Basin, an area that has provided much of the oil and gas production for the US shale revolution.
The move would indicate a shift in strategy by Shell. Speaking to an analyst earlier in the year, Ben van Beurden, the oil company’s CEO, said the oil field was:
“Part of that core position simply because we do see the running room in there, and we do actually believe it is a high-quality position, plus a high-quality operation that we have there. And therefore, we will continue to invest in it until, indeed, it doesn’t make sense anymore.”
Shell owns the rights to some 260,000 acres in the region, where it currently produces 160,000 to 170,000 barrels per day (bpd) of oil. This could be worth as much as $10 billion in total. It is likely that some or all of this could be used to fund carbon-neutral energy projects.
The oil major has committed to becoming a net-zero carbon business by 2050, and it has already made progress by launching a carbon-neutral range of lubricant products, but its medium-term targets have recently been challenged in a Dutch court. The ruling means that Shell is now obliged to reduce its emissions to 45% of 2019 levels by the end of the decade, which is somewhat faster than it had originally planned.
The possible sale of its Permian assets may indicate that the company is accelerating its transition to the low-carbon economy.