CEO Peter Voser said it will take longer than expected for the company to reap benefits from its shale gas projects duas a result of poor short-term results.
Weak U.S. shale liquids production contributed to a $2.2-billion (U.S.) charge Shell revealed in August and was a key factor in its decision to abandon its goal to deliver four million barrels a day of production by 2017.
“We didn’t get the results which we were expecting to get in the shorter term and we will therefore have to develop this a little bit more before we can take benefits from it,” Voser told reporters on the sidelines of the World Energy Congress.
“It was clearly not as successful as thought.”
Vast reserves of shale oil and gas are likely to make the United States the largest oil and gas producer in the world this year, according to the U.S. Energy Information Administration, but the rush to cash in on the shale bonanza has cost some latecomers to the market dearly.
Voser was also skeptical about the success of shale development elsewhere.
In contrast to more optimistic outlooks at the conference from Saudi Aramco’s chief executive officer and Algeria’s energy minister on shale gas development in their countries, Voser said it will take decades before the revolution in the United States can be replicated elsewhere in the world.
“This is a big hype at the moment,” Voser said.
Shell said last year that it planned to spend at least $1-billion exploiting China’s potentially vast resources of shale gas. The company secured China’s first product sharing contract for shale gas, hoping that getting in early will allow it to be a big beneficiary from the sort of boom in shale that has transformed the U.S. energy market.
Voser is due to retire from Shell at the end of March, 2014, after 29 years with the company and will be replaced by downstream director Ben van Beurden.