Shell’s capital investment hits $37.3 billion

Shell’s capital investment hits $37.3 billion

Shell received $14.7 billion income and returned $11.8 billion to its shareholders through dividends in 2014.   The company, which made this disclosure in its 2014 sustainability report released at the weekend, said that its total capital investment of $37.3 billion by the company in 2014 would help to build and sustain business for the future.

Besides, Shell paid globally $14.3 billion in income taxes and $3.9 billion in royalties in 2014. “We collected $72.7 billion in excise duties, sales taxes and similar taxes on our fuel and other products on behalf of governments”, it stated.

It disclosed that it has made divestments of $14 billion from its non-core portfolio. “We also spent $1.2 billion on our research and development programme.

Shell generated $45 billion of cash flow from its operating activities in 2014. Our SEC proved reserves replacement ratio (RRR) was 26 per cent for 2014 and our three-year average RRR was 67 per cent from 2012 to 2014. Our average organic RRR was around 85 per cent over the last three years.

The organic RRR excludes volume changes due to acquisitions, divestments and price effects and represents our ability to internally maintain and grow production”, it said.

The company said that it started up Bonga North West (Shell interest 55 per cent), off the coast of Nigeria. “The Gumusut-Kakap platform in Malaysia (Shell interest 29 per cent) started exporting oil to shore.

In the Gulf of Mexico, first oil flowed from our Cardamom project (Shell interest 100 per cent) and Olympus, our largest floating deep-water platform in the Gulf of Mexico, began production of oil from Mars B (Shell interest 71.5 per cent).

These four projects combined have the potential to deliver around 300,000 barrels of oil a day at peak production (100 per cent).   “We successfully integrated the part of the Repsol LNG portfolio that we acquired into our business”.

It puts its oil and gas production in 2014 at 3.1 million barrels of oil equivalent a day, representing four per cent decrease from 2013. “Our sales of liquefied natural gas increased to around 24 million tonnes: this increase of 22 per cent from 2013 mainly reflects the contribution from the acquisition of part of the Repsol LNG portfolio.

Exploration and commercial activities continued to add potential resources. This underpins our long-term growth plan”, it added.   The company stated that its sustainable development continued to account for 20 per cent of the company scorecard, which helps determine the annual bonus levels for all our employees.

It said that in 2014, the Shell Executive Committee’s sustainable development measures also accounted for 20 per cent of their scorecard. “This was split evenly between Shell’s safety and environmental performance, including targeted measures covering operational spills, energy intensity and use of fresh water.

From 2015, Process Safety Tier 1 events will be introduced as a new measure, receiving the same percentage weighting as personal safety. Process safety and personal safety will receive a weighting of five per cent each, the volume of operational oil spills and energy intensity will be weighted at four per cent each, and fresh water use will be weighted at two per cent.

“Targets are set each year by the Board’s Remuneration Committee taking into account the performance achieved in the last three years, to incentivise continuous and sustained improvement.

In 2014, our performance was better than the target for all sustainable development measures and our strongest results to date”, it said.