Conventional oil & gas
The conventional oil and gas business is a cash engine for Shell. It plays a key role in improving and sustaining oil and gas production. By producing safely and reliably, this business provides cash to fund the development of new opportunities for Shell.
The portfolio contains assets that produce both oil and gas, onshore and offshore, in shallow and deep-water settings.
This part of our business includes a large range of assets, from more established basins such as in the North Sea, Nigeria, Malaysia, Oman and Brunei to more recent positions such as in Egypt, Iraq, Italy and Kazakhstan.
Our conventional oil and gas operations are important to most of the countries in which we operate. We have always worked with a high level of government involvement and regulatory control and we partner with others to execute operations and share risk. We have a proven capability to sustain deep relationships, spanning many decades, with governments, national oil companies, other international oil companies (IOCs) and independents.
In Oman and Brunei, for example, we helped build their oil and gas businesses which have created a foundation for broader development that remains a principal source of revenue. In the UK, Norway, the Netherlands and Denmark, we partnered with other IOCs and led the oil and gas industries, which helped boost these economies.
We expect to further strengthen this portfolio by divesting non-strategic positions and focusing on improving attractiveness and resilience.
After the start-up of Maharaja Lela South (ML South) and Kashagan in 2016, we expect new production from Gbaran-Ubie phase 2B and the Schiehallion redevelopment to come on-stream in 2017. This, combined with lower costs and improved uptime, should improve our free cash flow and returns.