Shell chief executive Ben Van Beurden has admitted the supermajor's oil output will probably never return to levels seen last year as he gave an early taster of the new reshaped business it expects to announce in February, including plans to concentrate its upstream unit on just nine core regions.

The newly designated core areas — Brazil, Brunei, the Mexican and US areas of the Gulf of Mexico, Kazakhstan, Malaysia, Nigeria, Oman, the Permian shale basin in the US and the UK North Sea — currently generate 80% of cashflows in Shell’s upstream business.

Shell is also planning to cut its refining sites from 14 to six and transform them into what it called “high-value energy and chemicals parks”, the company said as it released third-quarter results on Thursday.

Those six sites are Deer Park and Norco in the US, Pernis in the Netherlands, Pulau Bukom in Singapore, Rheinland in Germany and Scotford in Canada.

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Van Beurden elaborated on the plan for the upstream unit, which currently has positions in about 30 regions around the world, in a call with journalists.

In the main, assets currently outside the new core regions will either be run for cash under a new “lean portfolio mode” or sold off, Van Beurden said.

However, the plan will be flexible, with the possibility that some developing business regions, such as in Suriname, could be central to the business.

Regions currently considered core, meanwhile, could fall out of this classification in future.

“It very much depends on how these businesses go in terms of running room, what do we see in terms of future value potential, how we see the risks of these businesses going forward. It is not a classification that is forever," he said.

Van Beurden also admitted that Shell's oil output probably hit its peak last year when production was about 1.7 million barrels per day and will never be as high again.

"Do we believe that we can grow our business? Well, in terms of cash, we have always said it is value over volume. We do not have volume targets," he said.

"But it is probably fair to say that 2019 was the high point when it comes to our oil production."

Total group production last year, including gas, was about 2.7 million barrels of oil equivalent per day.

In April, the 113-year-old oil and gas company unveiled plans to become carbon neutral by 2050 and in June said it was embarking on a programme to reshape its business.

The new strategy is expected to be fully announced in February next year but Van Beurden has said Shell's upstream oil and gas business will remain critical to ensuring strong cash flows in the near-to-medium term.

Analysts at Redburn said in a market note: "The company teased the new strategy to be announced in February. The key point is that upstream will focus on just nine core regions with other areas divested/run for cash.

"Marketing and liquefied natural gas will remain key growth areas, as will the new integrated power business (although no firm targets yet this morning)."