Page 11 - EurOil Week 44 2021

EurOil INVESTMENT EurOil

Shell resists investor call for

company’s break-up

NETHERLANDS ROYAL Dutch Shell has rejected a call by an we uniquely make a difference in the energy
activist shareholder to break up the oil major, transition.”
The play by Third Point arguing that the company works better as a Shell CEO Ben van Beurden insisted that the
comes as Shell faces united entity. company’s strategy was both coherent and well
unprecedented pressure Third Point, owned by billionaire activist understood by most shareholders.
to do more to address investor Daniel Loeb, has accumulated a stake The Anglo-Dutch major reported a surge in
its emissions. valued at nearly $750mn in Shell, and is seeking third-quarter adjusted earnings on October 28
its break-up. According to Reuters, Third Point to $4.13bn, from $955mn a year earlier, although
argues that the major has “too many competing this compared with $5.53bn in the second quar-
stakeholders pushing it in too many different ter of this year. Shell cited tax effects, the impact
directions,” leading to “incoherent” strategy. of Hurricane Ida in the US Gulf region and
The play by Third Point comes as Shell faces smaller contributions from trading and opti-
unprecedented pressure to go further in reduc- misation as the main factors behind the quar-
ing its emissions. A Dutch court ruling in May ter-on-quarter drop.
has ordered the major to strive to make deeper Shell wants to build up its natural gas and
cuts in its Scope 1 and 2 emissions, and also renewables businesses and establish early posi-
address Scope 3 emissions from the use of its tions in hydrogen and other low-carbon tech-
products by customers. Shell has responded by nologies. It is meanwhile shifting away from oil.
stepping up its targets, but still has not commit- As part of this change in strategy, Shell struck
ted to tackling Scope 3. a deal in September to divest its US Permian
Third Point wants to see Shell split into sev- business to ConocoPhillips for $9.5bn in cash,
eral standalone businesses, including a legacy and it plans to distribute most of the proceeds to
one that would focus on oil and gas and another shareholders.
that would commit to “aggressive” investment “This quarter we’ve generated record
in renewables and other low-carbon technolo- cash flow, maintained capital discipline and
gies. However, Shell’s management has hit back announced our intention to distribute $7bn to
against the proposal. our shareholders from the sale of our Permian
“If you were to split that into component assets,” Shell CEO Ben van Beurden commented
pieces, I think that can sound really interesting in a statement. “Today, we also set a new 2030
from a financial perspective,” CFO Jessica Uhl target to halve the absolute emissions from our
told reporters on October 28. “But in terms of operations compared to 2016 levels on a net
real solutions, I think that breaks down and basis. Altogether, this is clear evidence of how we
our ability to integrate and bring these differ- are accelerating our Powering Progress strategy,
ent pieces of the puzzle together will be how purposefully and profitably.” ™

Week 44 04•November•2021 www. NEWSBASE .com P11