* Shell to allocate 85 pct of new shale capex to oil -exec
* Energy firm expects shale business profits in 2019
* Shell to decide on
By Ron Bousso and Ernest Scheyder
The Anglo-Dutch company aims to boost its overall shaleproduction by 200,000 barrels of oil equivalent per day (boe/d)to 500,000 boe/d between 2017 and 2020, mostly in
Although the shale business has yet to generate a profit, itis expected to do so next year, Greg Guidry, who heads Shell'sshale operations, told Reuters on the sidelines of the CERAWeekenergy conference in
Shell, like Exxon Mobil Corp and Chevron Corp, aims to make shale production a driver of growth in thenext decade. But today most of its output is natural gas, whereprofit margins are lower.
As a result, around 85 percent of Shell's shale budget forat least the next two years will go toward new oil resources,particularly in the Permian oilfield of
"We're not spending very much at all on the dry gas assets,"Guidry added. "Liquids is growing very rapidly because that iswhere our capital is going."
After years of faltering performance and increased spendingin shale, Shell has in recent years transformed the business toadapt to the sharp drop in oil prices since 2014. Shale oilwells today can be profitable with oil prices above
Shell has earmarked between
Gas production will remain largely flat in the coming yearsand would be boosted in
In its eastern
Shell also is advancing shale production in
Shell's 2016 acquisition of BG Group in 2016 boosted theshare of natural gas to 50 percent of its global fossil fuelsoutput and made it the world's largest natural gas trader.(Reporting by Ron Bousso and Ernest Scheyder in HoustonEditing by Gary McWilliams and David Gregorio)