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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Shell, Anadarko mull clean break from Permian venture

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LONDON/HOUSTON: Royal Dutch Shell Plc and Anadarko Petroleum Corp may let a 10-year joint venture in the oil-rich Permian Basin of Texas expire and split their properties, hoping to speed up development, according to a senior Shell executive.


The divorce and re-parceling of acreage would let each company drill and develop new wells at its own pace in the Permian, which has become the US oil industry’s hottest development area for its low operating costs as crude prices CLc 1 hover under $50 per barrel.


Shell and Anadarko have been discussing how to proceed after the partnership agreement expires this summer and are not likely to renew it, Greg Guidry, who oversees the Anglo-Dutch group’s shale business, said.


The talks come as Shell hopes to boost its North American shale output by 140,000 barrels of oil equivalent per day in the next three years, a goal that relies largely on the Permian, the largest oilfield in the United States.


Talks have involved scenarios where acreage would be divvied up, allowing each company to individually develop the fields, he said. Under one proposal, “we could have ideally two 100 per cent owned and operated parcels,” Guidry said.


“That would be a split that will allow us to manage the flexibilities in terms of capital pace, separate of Anadarko,” he said in an interview this month.


A Shell spokesman said late last week that negotiations continue between both sides. The agreement was first signed in 2007 between Anadarko and Chesapeake Energy Corp. Shell bought Chesapeake’s Permian holdings in 2012 and inherited the joint venture. — Reuters


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