18 March 2008 18:06 [Source: ICIS news]By Nigel Davis
LONDON (ICIS news)--Shell is spending heavily to grow. Over the past four years it has invested $60bn (€38bn) from profits of $93bn and handed $55bn back to shareholders. It says it will continue to spend hard to push into new areas like liquefied natural gas (LNG), gas to liquids (GTL) and oil sands.
Buried in this huge number are the monies invested in chemicals. Shell is building a new cracker and downstream units in ?xml:namespace>
Chemicals now is closely allied to the energy giants refining business and reported in its oil products and chemicals segment. The synergies that were expected from more closely linking the two operations are beginning to show. Chemicals profits were up strongly last year not only on prices and volumes but on significantly better plant reliability – three percentage points higher over the year at 93%.
That better performance helped underpin in 2007 the continuation of a profitability profile that saw the return on capital employed in chemicals grow each quarter for two years.
As many as 6,000 employees worldwide are working on the
Shell’s investments in
Shell’s ‘strategy for the heartlands’ in chemicals applies to Europe and the
In Europe, for example, last year investments were made to take hydro wax feed for the Moerdijk cracker in the
Shell’s plans for chemicals in
Shell’s wider capital spending plans, however, are putting it on an ambitious growth course in oil sands, GTL and LNG. At the same time it is building on its foothold in biofuels pushing ahead with second generation projects, including the use of marine organisms to produce biofuels feedstocks.
Shell is the world’s largest distributor of biofuels and blended some 5bn litres in 2007, up from 3.7bn litres in 2006, Routs said. It processes, trades, blends and distributes first generation products – those made largely from food crops – but is pushing the envelope on second generation fuels made from cellulosics and biomass. It is looking at cellulosic ethanol in
Broadening the footprint of operations extends the companies franchise away from big oil and gas to what are likely to prove to be vitally important new areas in the coming decades.
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