Shell Rethinking North Sea Project
Late yesterday, Royal Dutch Shell PLC (NYSE: RDS-A) said that it plans to "reassess the development plan" for its joint venture with the U.K. division of Exxon Mobil Corp. (NYSE: XOM) for the Fram oil and gas field in the North Sea. The company said that "early assessments have shown unexpected results."
Shell owns 32% of the joint venture and is the field operator. Fram was cleared for development last October and, at that time, the companies expected production to reach 35,000 barrels a day of oil equivalent using a floating production storage and off-loading (FPSO) rig. That is not a huge project by Shell's or Exxon's standards - Shell's production totaled about 3.2 million barrels a day in 2011 and Exxon's topped 4 billion barrels a day. But it is a decent size and is located in an area that is not subject to the turmoil of many of the major companies' wells.
There is no indication in Shell's announcement of whether the "unexpected" results were good news or bad. Generally speaking, though, if the initial drilling showed a better-than-expected result, Shell almost certainly would have said so.
Shell stock is up about 0.6% in very early trading this morning, at $65.54 in a 52-week range of $60.62 to $74.09.
Filed under: 24/7 Wall St. Wire, Commodities, Oil & Gas Tagged: RDS-A, RDS-B, XOM