Royal Dutch Shell Chief Executive Ben van Beurden said the company's withdrawal from the Wheatstone LNG project in Australia was one of the "hard choices" he has had to make and added that LNG producer Nigeria was still a concern.
"We are taking stock of our investment opportunities and operating positions," the Shell CEO said in presenting his new strategy to investors while explaining the recent offloading of the Chevron-led Wheatstone project stake and other assets.
Shell agreed in January to sell its interest in the Wheatstone natural gas fields offshore Western Australia and the LNG project to a unit of Kuwait Petroleum Corp. as part of a new strategy as regards its worldwide portfolio.
Shell sold its 8 percent equity interest in the Wheatstone-Iago field and 6.4 stake in the 8.9 million tonnes per annum Wheatstone LNG venture for US$1.13 billion in cash.
Van Beurden said at the time that Shell would remain a major player in Australia's energy industry where it is developing the Prelude Floating LNG venture and is a shareholder in the Browse FLNG project.
The company had failed to meet earnings expectations during two quarters, blaming over-capacity in Europe and Asia and problems in Nigeria and other locations.
Van Beurden again mentioned concerns about LNG producer Nigeria in his new presentation, saying that returns in 2013 were impacted by "the security situation."
The Shell CEO said he was now posing some question. "Are our assets attractive economically, and are they resilient to industry cycles? Are our plans credible, are they competitive and are they affordable?
"This approach is driving hard choices on today's asset base, new opportunities, and disposals plans, where we have recently announced exits from Australia and Italy downstream, Wheatstone LNG in Australia, and US gas-to-liquids," Van Beurden stated.
The CEO said Shell's strategy is founded on technological expertise, disciplined capital investment, integrated operations and large scale.
Van Beurden explained: "Shell has a strong asset base and industry leadership in many of its growth themes. While this position of strength gives confidence for the future, it is also clear that we need to get a tighter grip on performance management in Shell.
"I am determined that, by focusing sharply on our three key priorities - better financial performance, in particular in our Upstream Americas and Downstream businesses, enhanced capital efficiency, and continuing strong project delivery, we will continue to grow our cash flow and improve our returns."
