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BP a better investment than Shell right now

Screen Shot 2014-01-30 at 00.47.49Extracts from an article by David Thorpe published 22 July 2014 by What Investment under the headline: “M&G: BP is a better investment than Shell right now”

Felton’s reason for not investing in Shell at present is that he believes the company has made a significant strategic blunder.

‘Shell has always been the high cost, low risk producer. They are the archetypal supertanker of the oil industry. But a few years ago, they began to focus on extracting very expensive oil from the Canadian sands. The rationale was that the higher production cost would be offset by the ease of transporting the oil just next door to the US. And that made sense, when the US was the largest oil market in the world, but the rapid acceleration of the fracking industry means that the US could become self-sufficient in energy within one or two years, which means Shell wouldn’t have that market.’

He continued: ‘Shell has invested a lot over the past decade, maybe £40 billion in capital expenditure around the world, pursuing its high cost, low risk production strategy and has very little to show for it.’


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