Shell ditches exploration plans, as it withdraws its application for Norwegian licenses, citing its BG acquisition and low oil prices.
The oil and gas supermajor was expected to be one of the main bidders in Norway’s 23rd licensing round, having previously completed and submitted its application.
However, after withdrawing all applications, the company released a statement stating its $70 billon acquisition of rival BG Group and the low global oil price behind its decision not to pursue further.
Shell Ditches Exploration Plans
“We have earlier communicated reductions in our global frontier exploration activities in the foreseeable future, to achieve synergies in the combined portfolio. In addition, the market situation is very challenging,” said Shell Upstream director, Andy Brown.
“In this light, we have chosen not to pursue further the opportunities in the 23rd licensing round.”
“Norway is still a heartland for Shell, and in a long term perspective, we regard the oil and gas potential in the northern areas as important. We will continue to pursue opportunities for growth in Norway, including the Barents Sea, if the right opportunities arise,” Brown concluded.
Managing Director Norske Shell, Tor Arnesen, added: “The decision was taken after a global assessment, and reflects a challenging market situation, which requires difficult portfolio choices.”
“Despite knowing we could have explored safely, both environmentally and technically, the current conditions are such that we globally have to prioritise activities with a shorter return on investment compared to a potential Barents Sea discovery.”
“This is of course tough for our employees, who have matured the application in an exceptional way.”