Shell Says Upstream Ops In Malaysia Still Making Money

KUALA LUMPUR, March 23 (Bernama) -- Shell's upstream operations in Malaysia are still making money as its unit operating cost here is well below the current global oil prices, says Royal Dutch Shell's global Upstream Director, Andrew Brown. With global crude oil prices hovering around US$40 per barrel, Shell's operating cost in Malaysia is manageable and there is no reason to shut production, he said. (US$1 = RM4.00). "Unit operating cost in Malaysia is well below the oil price. Malaysia continues to be an important country for Shell and it will continue to invest," he told a small media group here today in conjunction with his visit to the country, where the company is marking its 125th anniversary. Brent crude futures and US crude futures were hovering around US$41 per barrel on Tuesday. Brown said the whole Shell group, including its newly acquired British giant BG Group, produces 3.7 million barrels of oil equivalent per day (boe), with the unconfirmed production figure for upstream operations in Malaysia at roughly 135,000 boe. "In the last two years, we made 11 discoveries in Malaysia. We are very focused on our business in Malaysia, and seeking new opportunities to further grow, while reinforcing some of our joint ventures like the Baram Delta production sharing contract. "While it's now not a time to spend a lot of money, we are demonstrating that we are here to stay in Malaysia -- an important partner for Shell's upstream position," said Brown. Royal Dutch Shell is reserving US$33 billion as capital expenditure investment for its global operations this year, he said. "Shale is expected to fill the supply gap in world energy demand, which still remains healthy," added Brown, who has been leading the Anglo-Dutch company's shale resources unit since early this year. --BERNAMA