* Shell to boost shale output by 140,000 bpoed by 2020
* Shell shale output profitable at average oil price $40/bbl
* Argentina shale development decision in 18 months
By Ron Bousso and Ernest Scheyder
HOUSTON, March 7 Royal Dutch Shell is
ramping its North American shale output earlier than planned to
lock in quick returns from what has become one of its most
profitable businesses, the head of Shell's unconventional energy
The Anglo-Dutch company plans to make shale oil and gas in
the United States, Canada and Argentina a key engine of growth
in the next decade, targeting output of around 500,000 barrels
of oil equivalent per day (boepd), Greg Guidry told Reuters in
A drive to cut the cost of producing oil and gas from U.S.
shale deposits has proven so effective that Shell has
accelerated development plans, Guidry said on the sidelines of
the CERAWeek industry conference in Houston.
It aims to boost output by 140,000 boepd over the next three
years in the Permian basin in West Texas and the Duvernay region
in Canada, said Guidry, an executive vice president.
Shell had previously expected to hit that target after 2020.
Shell produces 280,000 boepd in shale- a tenth of the
company's overall output of 2.8 million boepd in 2016. The firm
is targeting an increase in global output to around 4 million
boepd by 2020.
The world's top oil and gas companies such as Shell, Exxon
Mobil and Chevron have traditionally focused on
developing complex projects such as offshore fields and
liquefied natural gas plants that are expensive and take years
The sharp drop in oil prices since 2014 - a barrel is
currently worth around $56 - has pushed boards to
increasingly look at shale, which is cheaper and faster to
Since 2013, Shell has overhauled its shale business, selling
assets and streamlining operations to better compete with
smaller, more nimble shale-focused producers.
Shell's shale output is profitable with oil prices at $40 a
barrel, with the most productive wells at an even lower
breakeven, Guidry said.
Exxon and Chevron are betting heavily on shale output in the
coming years. Shell's short-term growth will mostly come from
deepwater production in Brazil as well as LNG projects.
Further expansion in shale beyond the next three years is a
possibility, Guidry said.
Shell is also developing shale capacity in the Vaca Muerta
region in Argentina, where it last month reached a deal with
state-run company YPF to invest $300 million.
The company will decide in around 18 months on whether to go
ahead with commercial scale development of the unconventional
formation in Patagonia, where it holds around 250,000 acres,
(Reporting by Ron Bousso; Editing by Simon Webb and David