Growing oil and gas production from shale fields will act as a “balance” for deepwater projects, the new head of Royal Dutch Shell’s US business said, as the energy major strives for flexibility in the transition to cleaner fuels. Gretchen Watkins said drilling far beneath oceans in the US Gulf of Mexico, Brazil and Nigeria secured revenues for the longer-term, but tapping shale reserves in the US, Canada and Argentina enabled nimble decision-making.

“The role that [the shale business] plays in Shell’s portfolio is one of being a good balance for deepwater,” Watkins said in her first interview since she joined the Anglo-Dutch major in May.

Capital-intensive deepwater projects take time to develop, but are seen as lucrative long-term investments.

Meanwhile, shale projects require modest cash injections to start up but they ebb and flow faster.  “You can be much more agile in your investment decisions,” said Watkins, adding that spending and operations in the shale business can be ramped up or down, depending on market moves, according to Financial Times.

“[It] is a natural hedge in the portfolio,” she added.

Watkins, the former chief executive of Denmark’s Maersk Oil before it was acquired by France’s Total, has become head of the shale business and will take on an additional role overseeing all US operations in the future.

Investments into shale have risen as energy companies have been under pressure to rein in costs, pay down debt and boost returns to investors through dividends and share buybacks.

So-called short-cycle projects have also become more attractive amid uncertainty about future demand for fossil fuels and the expected global shift towards cleaner forms of energy.

Shell, Watkins said, was making bets in order to be in a “thriving mode” through a turbulent energy transition. Shell is allocating between $2bn and $3bn every year to the shale business, which is about 10 per cent of the company’s annual capital expenditure until 2020 and half of its expected spending on deepwater projects.