Ben van Beurden: Shell “reshaping” is beginning to bear fruit

The boss of Shell said today that the energy giant’s “reshaping” is beginning to bear fruit.

Chief Executive Ben van Beurden acknowledged 2016 was a “challenging” year of “transition” following the takeover of BG group.

But he insisted in 2017 Shell would “follow through on delivery”.

He was speaking at the London Stock Exchange as Shell unveiled its results.

“These show we are successfully pulling all these powerful financial levers,” van Beurden said.

“I want Shell to be a leader in our industry.

“There is no doubt 2016 was a challenging year.

“The reshaping of Shell as a result of it (the takeover) has now been really starting to show.”

He said the company had “hydrated and simplified” its portfolio.

Earlier this week, Shell announced it will sell off assets that contributed more than half of the company’s UK North Sea production last year.

London-based Chrysaor will pay up to $3.8billion (£3billion) for the company’s interests in nine fields and a 10% stake in Schiehallion, west of Shetland.

In doing so, it will become one of the UK’s biggest independent oil and gas producers.

According to analysts, the sale will add momentum to a $30billion (£24billion) divestment programme, which was intended to balance the books following the Shell’s takeover of BG Group.

Van Beurden said today the company had hit the half-way mark of this strategy.

The deal, which was backed by EIG Global Energy Partners, is made up of an initial consideration of £2.4billion and a payment of up to £480million between 2018 and 2021, subject to commodity prices.

A further £145million could also be due if additional discoveries are made on the acreage it is purchasing from Shell.

The decommissioning bill for the assets is expected to come to £3.1billion. Shell will retain a fixed liability of £800million, with Chrysaor taking on the remaining costs.

Upon completion of the sale, Shell will be left with the operatorship of six fields in the North Sea, including Brent Charlie. Its main non-operated assets include Clair, Schiehallion and Etap.