Royal Dutch Shell (LON:RDSA) has okayed the expansion of the Penguins oil and gas field in the UK North Sea, the blue-chip oil major has said. The move marks the group’s first major new project in the ageing basin in six years.
Shell’s share price has slipped into the red in today’s session, having given up 0.39 percent to 2,563.50p as of 13:48 GMT. The stock is underperforming the broader London market, with the benchmark FTSE 100 index currently standing 0.05 percent lower at 7,774.57 points. The group’s shares have added more than 12 percent to their value over the past year, as compared with more than a six-percent rise in the Footsie.
Shell greenlights North Sea project
Shell unveiled a final investment decision on the redevelopment of the Penguins oil and gas field in the UK North Sea. The decision authorises the construction of a floating production, storage and offloading (FPSO) vessel, the first new manned installation for the Anglo-Dutch oil major in the northern North Sea in nearly three decades.
“Penguins demonstrates the importance of Shell’s North Sea assets to the company’s upstream portfolio,” said Andy Brown, Upstream Director, commented in a statement. Reuters noted in its coverage of the news that the move marked the first major project Shell has announced since 2012, when it made a final investment decision for the Fram field in the central North Sea.
The company noted that the project is expected to generate profits even with oil prices below $40 a barrel.
Analysts on Shell
Moran Stanley, which sees the oil major as a ‘top pick,’ boosted its price target on the shares from 2,930p to 3,040p last week. According to MarketBeat, Shell currently has a consensus ‘buy’ rating and an average price target of 2,487.14p.