Royal Dutch Shell, Europe's largest oil company, could produce more natural gas than oil in 2012, according to comments made by President Marvin Odum at the U.S. Energy Information Administration's 2011 Energy conference in Washington. Odum said that is no accident and that natural gas is fuel source worth pursuing.
Shell (RDS-A) is taking a long-term approach to natural gas, Odum said. Oil prices have far outpaced natural gas for well over a year, but Odum said it is ''about a 10-, 20-, 30-, 40-year forecast.''
Shell has been diversifying its production model through acquisitions in the past year. In 2010, the company acquired Australia's Arrow Energy, a coal-bed methane gas producer, and paid $4.7 billion for East Resources, a deal that gave Shell exposure to the Marcellus Shale.
Also in 2010, Shell said it expects to spend $50 billion in Australia over the next decade and much of that total will be presumably spent on developing gas projects as Australia is home to some of the world's largest natural gas reserves.
Odum also called the U.S. government's delays in granting Shell permits to commence a drilling project off the coast of Alaska ''irresponsible.'' Shell had hoped to start the project this year, but the start data has been pushed back to at least 2012.