Shell Oil announces 1998 capital and exploratory expenditure programme

Shell has announced that capital and exploratory expenditures for 1998 are projected to be $ 5.3 billion, up $ 1.7 bn from expected 1997 expenditures. $ 1.4 bn of the increase is the result of the announced acquisition of Tejas Gas Corporation.
Approximately $ 2.7 bn is allocated for exploration and production activities, equivalent to expected 1997 expenditures. Increases in Gulf of Mexico deepwater activity and new Tejas spending are being partially offset by reduced spending in the onshore and shallow regions of the Gulf. Oil Products spending is equivalent to expected 1997 expenditures of $ 600 mm. Chemical Products expenditures are expected to be $ 600 mm, an increase of $ 200 mm over expected 1997 expenditures.
"Our 1998 capital and exploratory spending continues to support growth opportunities in each of our business segments," said Philip J. Carroll, Shell Oil Company president and CEO. "Capitalising on our successes in the Gulf of Mexico, we are making significant investmentsin our midstream operations with the recent announcement of our acquisition of Tejas. This acquisition allows Shell to increase further the value of its midstream Gulf of Mexico business and creates a sound platform for growth in new business ventures."
Domestic production of oil and gas in 1998 (including Shell's share of associated company production) is anticipated to grow in excess of 15 % above 1997 levels. Future production growth will be sustained with several new deepwater Gulf of Mexico developments which we expect to move forward with as part of the 1998 E&P capital programme. Specific plan details are expected to be announced in early 1998 after development decisions are finalised. This continued development activity clearly demonstrates Shell's commitment to profitable growth in the deepwater Gulf of Mexico. The level of overall production growth will vary according to results from mature provinces and the desirability of acquisition opportunities.
Capital expenditures in Oil Products include approximately $ 200 mm for modernising the Shell retail network and investing in retail and fleet growth extensions. Chemical Products expenditures in 1998 reflect plans for extensions to current manufacturing facilities and de-bottlenecking.