April 26 (UPI) -- Adding more opportunities in the offshore sector is part of the effort to retool the evolving portfolio for Royal Dutch Shell, its chief financial officer said.
Shell is the latest in the supermajors to publish results for the first quarter. The French company Total reported first quarter adjusted net income at $2.9 billion, up 13 percent from the same period last year.
Shell's net income was $5.3 billion, up more than 40 percent from the same period last year. Production of 3.8 million barrels of oil equivalent marked a 2 percent increase. The Dutch supermajor's earnings report came two days after it sold off its refinery business, including its retail service stations, in Argentina for close to $1 billion in cash.
"We continue to upgrade our portfolio through performance improvement new projects, divestments, and the development of new businesses," Chief Executive Officer Ben van Beurden said in a statement.
As of year-end 2017, Shell said about 80 percent of its proven oil and gas reserves will be produced by 2030, and then 20 percent from then on. The company is retooling its portfolio following the 2015 mega-merger with British energy company BG Group.
In January, the company announced one of its largest discoveries ever in the Whale prospect in the deep waters of the Gulf of Mexico. Its total deepwater production is on pace to flirt with 1 million barrels of oil equivalent per day by 2020.
In the first quarter, the company took nine exploration blocks put in the auction block for the Mexican waters of the Gulf of Mexico.
"This win, depending on future exploration success, gives us a competitive deep-water entry into Mexico and an opportunity to add a new deep-water heartland to our portfolio in the 2020s," Shell Chief Financial Officer Jessica Uhl said in comments on the quarterly report. "Elsewhere in deep water, we won four additional exploration blocks in Brazil, and for two of these blocks we will be the operator."
In a new era where oil prices are close to $70 per barrel, 19 of the 29 contracts on the auction block were awarded last month, with supermajor Royal Dutch Shell taking the lead in the tenders. Mexico aims to produce around 3.5 million barrels per day by 2025.
Shell's Brazilian subsidiary secured Brazilian exploration blocks in March. Brazil has more proven oil reserves than any South American nation except for Venezuela.
Consultant group Wood Mackenzie found that improved market conditions and improvements on where operators can break even in terms of the price of oil led to an uptick in industry sentiment. The most competitive prospects are in the waters offshore Mexico, Norway and the United Kingdom.