Oil and natural gas production at Royal Dutch Shell plc is on track to grow by almost 12% from 2010 levels over the coming three years, with a big boost from North American onshore and deepwater projects, CEO Peter Voser said Tuesday.

Speaking at the annual strategy meeting, Voser confirmed several long-awaited projects that are scheduled to increase upstream performance, pushing output to 3.7 million boe/d in 2014. The company’s existing resource base of 10 billion boe will support the upstream growth.

“Our growth to 2020 is supported by a potential 30 new projects with some 10 billion boe resources able to produce over 1 million boe/d,” said Voser. Twenty new upstream projects under construction are expected to add more than 800,000 boe/d of output.”

Last year’s exploration and development activity added almost 2.3 billion boe of new resources to Shell’s reserves base at a cost of less than $2/boe, said the CEO. “Discoveries in the Gulf of Mexico and Australia, and successful wells in North America tight gas, underpin this 2010 performance.”

Shell acquired tight gas property in the Marcellus Shale and liquids-rich assets in the Eagle Ford Shale through its purchase of East Resources Inc. last year. Additionally the company negotiated agreements with three national oil companies in 2010 — China, Qatar and Saudi Arabia — “covering new natural gas potential, and continuing Shell’s long history of partnering with NOCs,” said Voser.

This year 25 “high potential exploration wells” are scheduled to be drilled. The company “is planning to make a final investment decision on some 10 new projects in 2011-2012,” which include the Prelude floating liquefied natural gas (LNG) facility in Australia, a heavy oilsands project in Canada, as well as deepwater oil and gas developments at the Cardamon discovery in the Gulf of Mexico (GOM) and in Malaysia.

LNG projects alone are set to deliver a cumulative total of 500,000 boe/d by 2015, fed by new facilities ramping up in Qatar and Australia. Deepwater production is expected to add 200,000 boe/d by 2015. Heavy oil projects in Canada, the Netherlands and Oman would add around 90,000 boe/d by that date.

The new production targets are in line with Shell’s previous guidance of 2-3% annual upstream growth. However, the numbers eclipse last year’s forecast, which set the output target at 3.5 million boe/d by 2012.

“From Shell’s perspective, there is no change to our macro assumptions for long-term project assessment,” said Voser. “We plan inside a $50-90 range for oil and $4-8 for U.S. gas.”

Capital spending is expected to approach $100 billion through 2014. Shell plans a capital outlay of around $25-27 billion per year. Most of the funding is scheduled for gassy projects onshore in North America, as well as LNG and gas-to-liquids facilities overseas, said the CEO.

“We have made good progress in 2010,” Voser noted. “Our profitability is improving, and we are on track for our growth targets. There is more to come from Shell.”

On a U.S. Securities and Exchange Commission basis, Shell in 2010 added 1.37 billion boe of proved oil and gas reserves before production, of which 1.2 billion boe came from subsidiaries and 173 million boe was associated with the a share of equity-accounted investments. At the end of last year Shell’s net proved reserves were 14.25 billion boe, an increase of 117 million boe from year-end 2009, after taking into account 2010 production.

“My priorities are the same as I set out a year ago…a three-year plan for profitable growth and a more competitive performance from Shell,” said Voser. “We are one year into that program now and making good progress.”

The European major continues to cut costs. and more staff reductions are expected through 2012. Shell cut operating costs by around $2 billion in 2009, mostly by shedding 5,000 employees worldwide as it streamlined operations.

“Cost reduction and operating efficiency are a key part of Shell’s business, to ensure profitability for our shareholders and competitive energy prices for our customers,” said Voser. “Shell continues to sell noncore positions to enhance capital efficiency and as part of funding for future investment. Asset sales proceeds have exceeded $30 billion in the last five years and are expected to be up to $5 billion in 2011.”

Voser confirmed that Shell is negotiating with Japan’s government to provide LNG cargoes from the oil major’s Qatari operations. Shell’s three Japanese refineries were operating normally following last week’s earthquake, he said.

“It’s too early to speculate on the longer term implications of recent events in Japan, North Africa and the Middle East,” he told analysts. “But this is a clear reminder that such developments can have a substantial impact on oil markets, adding pressure to oil prices that have been rising anyway on the fundamentals. We are living in a very interdependent world.”

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