Page 14 - EurOil Week 07 2021

EurOil PROJECTS & COMPANIES EurOil

Shell doubles down on net-zero drive

EUROPE ROYAL Dutch Shell has announced a new strat- positions in hydrogen and biofuels and scale
egy that puts more emphasis on reaching its back the number of downstream sites it operates.
The Anglo-Dutch major net-zero 2050 target. But while the major plans Shell will also seek access to a further 25mn
is expanding its LNG to wind down its oil business steadily over the tpy annually of carbon, capture and storage
business, however. coming years and decades, it is targeting a 20% (CCS) capacity by 2035. It is already supporting
growth in LNG production by 2025. CCS schemes in Norway, the Netherlands and
Shell sees its oil output gradually diminish- the UK.
ing by 1-2% each year, as a result of divestments “Our accelerated strategy will drive down
and natural decline. It also intends to boost LNG carbon emissions and will deliver value for our
exports by a further 7mn tonnes per year by shareholders, our customers and wider society,”
2050, from the current 33.3mn tpy. CEO Ben van Beurden said. “We must give our
Shell is also rebalancing its investments. customers the products and services they want
Under the Powering Progress strategy, published and need – products that have the lowest envi-
last week, the major wants to reorganise its cap- ronmental impact. At the same time, we will
ital spending into three pillars named Growth, use our established strengths to build on our
Transition and Upstream. Some $5-6bn will be competitive portfolio as we make the transition
injected annually into Growth, including $3bn in to be a net-zero emissions business in step with
marketing and $2-3bn in renewables and energy society.”
solutions. A further $8-9bn will go towards Tran- Shell’s shift in direction is far less radical than
sition, constituting $4bn in integrated gas and that of its UK peer BP, which aims to scale back
$4-5bn in chemicals and products. Finally, some oil and gas production by 40% over the next dec-
$8bn will be left for Upstream investments. ade. The company has presented its own plan as
“Over time, the balance of capital spending more business-as-usual. It said it would continue
will shift towards the businesses in the Growth focusing on financial resilience and disciplined
pillar, attracting around half of the capital spend,” spending, promising shareholders a 4% annual
Shell explained. “Cash flow will follow the same increase in dividends. This is after the major
trend and in the long term will become less cut them by two thirds when the coronavirus
exposed to oil and gas prices, with a stronger link (COVID-19) pandemic began.
to broader economic growth.” Moving forward, Shell aims to distribute
Shell also said it aimed to cut its net carbon 20-30% of cash flow to shareholders through
intensity by 6-8% by 2023, 20% by 2030, 45% by dividends and buybacks. Operational spend-
2035 and 100% by 2050, setting its emissions in ing, meanwhile, will be limited to $35bn annu-
2016 as a baseline. It also wants to double power ally, and Shell will aim to sell $4bn of assets each
sales to 560 TWh annually by 2030, build up year.™

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