Royal Dutch Shell has decided to liquidate in South Texas. With a base of assets here the size of Rhode Island that the company once valued at $2 billion it's more likely that land is now going to sell for $650 million.
Why jump ship? The company told us the holdings just weren't going to meet their expectations. So what does that mean when the next company buys it all up?
“They're going to need more personnel helping them and in turn needing service companies that are going to help them from building locations to water security to disposal,” said Cliffe Killam, a partner with Killam Oil Company.
“Whatever changes there are with companies providing work and revenue -- I think that is here to stay for many more years, said Jaime Canales, Webb County commissioner for for precinct four.”
That means a good future for oil workers, small contractors and government revenues, but the future growth may also come with some additional problems for larger local oil companies.
“It creates additional pressure -- more product, more demand for human resources and for service companies,” said Killam. “It creates more demand for people on the service side of things but for operators like ourselves it makes our margins pretty thin.”