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Dodge & Cox Comments on Royal Dutch Shell

November 07, 2013 | About:
John Hussman

Holly LaFon

277 followers
LNG is also growing faster than other traditional sources of energy, partly due to growing power generation and industrial usage. In the form of LNG, natural gas can be transported long distances. The Middle East, Africa, and Australia have significant natural gas reserves and are among the largest exporters of LNG; the biggest importers include Asia and Europe. As one of the world's largest producers of natural gas and suppliers of LNG, Royal Dutch Shell (RDS) is well positioned to benefit from increasing LNG demand in our opinion. LNG continues to be a driver of future growth, accounting for nearly one quarter of Shell's new resource production. This well-diversified business segment has grown more than 10% annually over the last few years, and we project similar growth rates over our investment horizon. Shell's LNG growth is much faster than the demand growth for other traditional sources of energy. While we evaluate the geopolitical risks inherent in the Energy sector against company fundamentals, Shell is held in the Dodge & CoxGlobal Stock Fund and International Stock Fund due to its reasonable valuation and exposure to LNG.

From Dodge & Cox Funds' The Energy Sector commentary.


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