Shell and Devon Considering Investing in Natural Gas

February 1, 2010 | Print this Page.

Could a trend be forming? Exxon and France's Total S.A. are investing in shale plays and now Royal Dutch Shell Plc and Devon Energy Corp. may buy U.S. shale gas producers or partner with them on related projects according to Bloomberg.

Shell's Updates

Even though Shell has cut 5000 positions since Peter Voser took over as CEO in mid-2009 with more layoffs possible, the company is interested in shale gas. Onshore Asset Manager David Todd of Shell says that Shell is looking at Marcellus Shale.

An AP story quotes Voser. "New shale gas production is 'a big deal and necessary—globally,' Royal Dutch Shell CEO Peter Voser told World Economic Forum delegates in Davos, Switzerland. He said people underestimate its potential to reduce dependence on oil and coal." In another Bloomberg story, Voser believes that oil demand won't return to past levels in a Bloomberg story.

The Houston Chronicle writes that Shell will continue its record breaking investing ways in oil and gas search up to as much as $28 billion in 2010. Shell has an oil-sand venture in Canada and continuing projects in Qatar and Malaysia. The company has a signed an agreement to merge sugar and ethanol assets in Brazel with Cosan SA Industria to allow the company to to invest in low-carbon, sustainable biofuels.

Devon's Plans

Oklahoma City's Devon Energy Corp. has a few things in common with Shell. First, it has assets in Brazil and it has shown an interest in Marcellus Shale.  Devon is working to sell offshore and overseas assets worth $7.5 million to lower debt and switch to shale gas production. The company recently passed on a Marcellus shale opportunity. The company hasn't said anything else about a potential merger or partnership.

Devon has a natural gas well-head in the Fort Worth area. Its site is one of two sites that has worrisome levels of benzene as reported by the Texas Commission on Environmental Quality (TCEQ) in the Fort Worth Business Press. The leak could've occurred because of a valve that someone left open. The good news is that TCEQ only found two problematic wells out of 94 tested wells.

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