Royal Dutch Shell (RDS.A) is a large oil and gas producer in North America that has been making acquisitions that are sure to increase its yields in the future. Shell is looking to make an impact in shale oil production, an industry that has the potential to change our entire economy in the next five years. Shale oil refers to a rock that releases petroleum like liquids when heated up and are richer in crude, a process that will revolutionize the oil industry. Domestically, it can be found in many different states and could potentially produce between 1.2-1.8 trillion barrels of oil in the future. To put these numbers into context; America consumed an estimate of 7 billion barrels of oil in 2011 according to the U.S. Energy Information Administration. The Royal Dutch Shell have viewed the extreme amounts of shale oil in America as an opportunity to expand and multiple their production in future years.
Since 2008, Shell has made key acquisitions in Texas’ Eagle Ford Shale, Marcellus Shale, and a recent 2 billion dollar addition on September 12th of properties from Chesapeake Energy Corp (CHK). This addition of the Texas based energy corp. that produces nearly 26,000 barrels of shale daily will more than triple Shell’s global production of shale oil. In the next five years, it hopes to increase this number ten-fold to over 250,000 barrels a day. Executive Vice President Russ Ford believes that recent evolution of shale oil in the United States will provide the opportunity for tremendous growth. Shell is currently producing about 381,000 barrels of regular oil a day in the United States, and hopes to one day produce these types of numbers in shale oil as well. With its $32 billion investment of capital in 2012 alone, it seems as if these estimates are extremely attainable and will make Shell an even larger global oil giant.
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