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Shell eyes return to robust growth after seven years

REUTERS , LONDON

Royal Dutch Shell PLC said it was planning a return to robust growth in oil and gas production after seven years of decline and unveiled strong reserves additions that should underpin longer-term growth aims.

Europe’s largest oil company by market value said it was targeting output of 3.5 million barrels of oil equivalent per day in 2012, up from 3.15 million last year — equivalent to an annual growth rate of 3.5 percent.

Italian rival Eni said on Friday it aimed to grow output by 2.5 percent per annum to 2013, while European No. 2 BP PLC is targeting annual growth of 1 to 2 percent.

Chief executive Peter Voser said higher output would allow Shell to boost cashflow sharply and become cashflow neutral by 2012. Shell also aims to grow output beyond 2012, although Voser said he had dropped a 2 to 3 percent long-term growth target.

Shell is looking to the deep water of the Gulf of Mexico, tight gas assets in North America and liquefied natural gas and coal seam gas in Australia to support its longer-term aims.

As part of this strategy, Shell and PetroChina hope to agree a joint US$3 billion takeover of Arrow Energy Ltd and Shell said talks with the Australian coal seam gas company were ongoing.

The company said that last year it added new reserves equivalent to almost three times the amount of oil and gas it pumped.

Its reserves replacement rate of 288 percent compares with levels of 133 percent at industry leader Exxon Mobil and 129 percent at BP.

High-cost, infrastructure-led projects, such as Shell’s US$18 billion to US$19 billion gas-to-liquids plant in Qatar and multibillion dollar oil sands projects in Canada, would in future only supplement the exploration effort, Voser said

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