The growth of Royal Dutch Shell Plc’s (NYSE: RDS.A) oil and gas operations in the next decade will depend on shale production, its chief executive has said, in the latest sign of western energy groups pinning their hopes for expansion on those unconventional resources.

Ben van Beurden told the Financial Times that he saw chemicals, electricity and biofuels as key sectors for Shell’s long-term future, as he positioned the company to face tightening constraints on burning fossil fuels. But he was also planning for growth in Shell’s traditional core oil and gas production business, focused on shale reserves in the U.S., Canada and Argentina.

Depending on how oil prices looked in the 2020s, he said, the company would probably want to keep investing in shale “because we will really want to grow this business quite quickly.”

Shell has suffered prolonged difficulties in shale in the past, and in 2013 had to take a $2.1 billion write-down on the value of unconventional oilfields in the U.S. and Canada. But van Beurden believes it has now improved the performance of the business enough to allow it to expand while making a profit.

The strategy aligns Shell with peers ExxonMobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), the two largest U.S. oil groups, which are looking to U.S. shale reserves as a principal source of new production over the next few years.

Shell is stepping up investment in the Permian Basin of Texas and New Mexico and the Duvernay Shale in Alberta, and expects to double total production of unconventional oil and gas from about 250,000 barrels of oil equivalent a day (boe/d) last year to about 500,000 boe/d by the end of the decade.

The chief executive said Shell had been working hard in the past few years to cut production costs in shale, and with “a little bit of help from the oil price going up, we now see that we can significantly accelerate investment into this opportunity”.

The endemic problem of U.S. shale development for all producers is that it has been hard to generate positive cash flow. Because production from each well declines very quickly in its first few years, companies need to keep drilling more to maintain output. But Shell says it has cut the cost to drill and complete each well in the Permian by 35% over the past two years, and it expects to be generating free cash flow from its shale operations by 2019.

Lower costs and the recovery in oil prices meant “you will see a tremendous amount of growth” in cash generation from shale, van Beurden said.

Over the next few years, Shell is expecting a boost to oil production from its deepwater offshore assets in Brazil and the U.S. Gulf of Mexico, and could invest in new LNG production plants in the U.S. and Canada.

Into the 2020s, however, it plans a greater focus on revenue streams that will be less constrained by policies to reduce greenhouse gas emissions, including petrochemicals and electricity. Shell has made a series of moves in recent months to strengthen its position in the power industry, with deals to buy Texas electricity group MP2, electric vehicle charging company NewMotion, and U.K. energy retailer First Utility.

“If you fast forward with another twenty, thirty, forty, fifty years, the power segment is going to be a very dominant part of the total energy system,” van Beurden said. “At the moment it’s only 18% but it will be more than 50 by the time this century is over. So we cannot pass up on that opportunity.”