Royal Dutch Shell has postponed decisions on whether to go ahead with two large oil and gas developments in the U.S. Gulf of Mexico (GoM) and North Sea after oil prices collapsed due to the coronavirus crisis, a company source said April 22.
The Anglo-Dutch company slashed its 2020 spending plans by a fifth as measures to halt the spread of the virus led to an unprecedented drop in oil demand and sent oil prices to their lowest in two decades.
As a result of this, the source said Shell had delayed a final investment decision (FID) to 2021 on whether to develop its Whale discovery in the southern part of the GoM. The source said some work on the project continued.
A decision on Whale was initially planned for later this year, following the discovery in 2017 of what Shell said was one of its biggest finds in recent years.
Shell, the operator of the Whale project, holds 60% in the field, while Chevron Corp. holds the remaining 40%.
The source also said Shell decided this month to defer a decision about the Jackdaw natural gas field in Britain s North Sea. The development plan originally envisaged linking the field to the existing Shearwater platform by 2024.
The delays come after private-equity backed Siccar Point, Shell’s partner in another North Sea project, Cambo, announced March 20 that the FID on the field was pushed back to 2021 due to coronavirus.
Shell previously said projects it would develop would be built to generate profit with Brent crude at $30 per barrel or more. The benchmark was below $20 on April 22.
Halliburton and larger rivals Schlumberger Ltd. and Baker Hughes Co. posted losses for the first quarter, owing to heavy writedowns on assets on the back of low oil prices.
Seth Urruty, COO of Oklahoma-based independent Camino Natural Resources, sat down with Jessica Morales to discuss staying attractive to investors plus utilizing technology.
“If this is an act of God, maybe I need to find another career because I guess God’s had enough of the oilfield,” said oilfield services worker Nils MacArthur.