The oil giant was on the back-foot during trading today.
By Ben Martin 8:13PM BST 18 Oct 2012
BP may have been hogging much of the limelight in the oil and gas sector of late, but today Royal Dutch Shell was receiving some unwanted attention from traders.
Concerns over slowing growth at the oil giant saw the group’s B shares fall 30½p to £22.02 in London.
“Shell has almost fully delivered on its big three projects, bringing to a close the investment cycle started in 2006, and starting a new one,” Goldman Sachs said, cutting its recommendation on the group to “sell” from “neutral”.
“This new cycle will be more capital intensive and will likely lead to lower returns,” the broker added, arguing that “over the next two to three years, Shell has little additional cash flow growth to deliver”.
Indeed, the broker has turned more cautious on the sector as a whole, arguing that the rise of shale oil means that the “decade-long rise in oil prices” is likely to come to an end.
BP, which received an offer for its stake in TNK-BP, added 3.7 to 452.05p. Kurdistan oil and gas explorer Genel Energy, helmed by former BP chief executive Tony Hayward, gushed up 38 to 845p as chairman Rodney Chase demonstrated his commitment to the company by buying 160,000 shares. Like Bumi, Genel has its roots as a cash shell and has come in for scrutiny recently.