Royal Dutch Shell said it was planning a return to robust growth in oil and gas production after seven years of decline and unveiled strong reserves additions that should underpin longer-term growth aims.
The oil company said it was targeting output of 3.5 million barrels of oil equivalent per day (boepd) in 2012, up from 3.15 million in 2009 - equivalent to an annual growth rate of 3.5 per cent.
The company also said it will cut 2,000 jobs by the end of next year to weather the economic slowdown, which has caused fuel inventories to swell in the US and Europe. There was no indication where the cuts, 1,000 of which had already been announced, would take place.
Earlier, Australia's Arrow Energy Ltd said it was in "active discussions" with Shell and PetroChina over their joint $3 billion takeover offer.
Shell's London-listed "A" shares were up 1.4 per cent at 0936 GMT, outperforming a 0.75 per cent rise in the STOXX Europe 600 Oil and Gas index.
"It's a very strong message," one analyst said, adding the output target was above his forecast.
The company previously said it expected production to be flat in 2010 before new projects ramp up in 2011 and 2012.
"We are moving into a delivery window across the next five years, and beyond that, we have a tremendous opportunity set for the 2015-2020 timeframe," chief executive Peter Voser said.
Italian rival Eni said on Friday it aimed to grow output by 2.5 per cent per annum to 2013 while European number two BP Plc is targeting annual growth of 1-2 per cent.
In its annual strategy statement, Shell also predicted rising production beyond 2012, underpinned by a new focus on exploration.
Mr Voser said high-cost, infrastructure-led projects, such as Shell's $18-19 billion gas-to-liquids plant in Qatar and multi-billion dollar oil sands projects in Canada, would in future only supplement the exploration effort.
Shell's production strategy has been built around such large, technology-driven projects in recent years.
Nonetheless, Shell said it will have to spend $25-$30 billion/year out to 2014 to achieve its growth - the largest capital investment or capex programme in the industry.
The company said that last year it added new reserves equivalent to almost three times the amount of oil and gas it pumped.
Its reserves replacement rate of 288 per cent compares with levels of 133 per cent at industry leader Exxon Mobil and 129 per cent at BP. It is also a turnaround from the 98 per cent Shell achieved in 2008 and the 17 per cent recorded in 2007.
"This was the best year for exploration in a decade," the company said.
Shell's focus on building production will also see it reduce its downstream footprint.
The company said it planned to exit 35 per cent of its retail markets, and repeated plans to sell 15 per cent of its world-wide refining portfolio.
Agencies