Canadian Press: Shell Canada boosts capital spending by 60%, spreads cash across country: “CALGARY - Shell Canada plans to raise its capital spending next year by more than 60 per cent to $1.8 billion, spreading the cash across Canada and the energy company's diverse array of assets.”: “it is 78 per cent owned by Royal Dutch/Shell, one of the world's biggest oil companies, headquartered in London and the Netherlands.” (ShellNews.net) Posted 19 Nov 04
CALGARY (CP) - Shell Canada plans to raise its capital spending next year by more than 60 per cent to $1.8 billion, spreading the cash across Canada and the energy company's diverse array of assets.
Shell's spending program announced Thursday broadly distributes money to the integrated oil company's natural gas and growing oilsands operations as well as its refinery and gasoline station network.
"While profitability of our existing businesses remains a priority, we will be putting more emphasis on our strong and diverse portfolio of growth opportunities over the next several years," Shell's new chief executive, Clive Mather said in a release.
"Our 2005 investment plan includes increased levels of expenditure to advance growth opportunities in our upstream businesses and to bolster our downstream marketing network."
Shell is one of Canada's biggest integrated energy companies with natural gas production in Western Canada and off the coast of Nova Scotia, major oilsands interests in northeastern Alberta, refineries in Edmonton and Montreal and a national chain of more than 2,100 gas stations.
The company employed 3,850 people at the end of 2003.
While Shell Canada trades publicly on the Toronto stock market (TSX:SHC), it is 78 per cent owned by Royal Dutch/Shell, one of the world's biggest oil companies, headquartered in London and the Netherlands.
Shell Canada joins a growing list of Canadian energy producers like Suncor Energy (TSX:SU) who are reinvesting some of their windfall cash flows from high oil prices into rising capital spending next year.
Shell generated record profits of $451 million in the third quarter, thanks to a huge boost in oilsands production.
The company's 2005 capital spending program includes $780 million for exploration and development of natural gas with an aim to maintain current production despite depleting reserves throughout North America.
This includes $335 million for the Foothills region of western Canada and $150 million to the Sable gas project off the coast of Nova Scotia, where Shell has a 31 per cent operating stake.
The rest of the exploration and production money will go towards unconventional gas opportunities - such as tight gas and coal-bed methane in Alberta and British Columbia - as well as the Peace River oilsands and the Mackenzie Gas Project in the Northwest Territories.
Shell is a partner in a $7 billion plan to build a natural gas pipeline from the Mackenzie Delta to ship currently stranded reserves in the Far North to energy-thirsty U.S. markets.
Shell will also spend $350 million on the Athabasca oilsands project where it owns a 60 per cent operating share. Some of the cash will go towards profitability initiatives to cut operating costs at the giant open-pit mine in northern Alberta and Shell's refinery outside Edmonton.
Money will also go towards the front-end engineering work of its planned, $4-billion expansion of Athabasca, designed to nearly double production by the end of the decade.
In its oil products business, Shell will spend $110 million for marketing and $370 million for manufacturing and distribution projects. The lion's share of this will be directed at upgrading the company's two Canadian refineries to meet future requirements for lower sulphur content in diesel fuel.
In trading on the Toronto Stock Exchange on Thursday, Shell Canada shares fell 69 cents to $74.71, a drop of nearly one per cent.
© The Canadian Press 2004