Shell unveils green strategy after oil output peak
Energy giant Royal Dutch Shell has announced that its oil output is locked in decline after peaking in 2019 as it outlined green plans to switch away from fossil fuels.
Shell said in a statement that it will invest up to $6.0 billion (4.9 billion euros) per year in green energy projects developing and promoting biofuels, electric car charging and renewables.
“More than half the amount could end up being spent on marketing,” Shell said.
In addition, Shell plans to still invest $8 billion annually on new oil and gas exploration.
The London-listed company nevertheless said that it anticipates a “gradual reduction” in oil output of 1.0-2.0 percent each year, including divestments.
“Total carbon emissions for the company peaked in 2018,” it added.
The global oil sector, nursing vast losses due to the Covid-19 pandemic, is accelerating plans to switch into greener energy and slash carbon emissions in the face of with intensifying climate change fears.
Shell chief executive Ben van Beurden said, “Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society.” “We must give our customers the products and services they want and need products that have the lowest environmental impact”.
van Beurden added that “At the same time, we will make the transition to be a net-zero emissions business in step with society” by 2050.
Shell is matching a commitment by rival BP as the Anglo-Dutch group’s update sparked more accusations of corporate “green washing” from environmental campaigners.
Head of Greenpeace UK’s oil campaign, Mel Evans said, “Shell… brazenly says it will dodge oil production cuts and will simply let output dwindle”.
“Without commitments to reduce absolute emissions by making actual oil production cuts, this new strategy cannot succeed nor can it be taken seriously.”
The sector’s transition demands big investments at a time when oil majors are looking to make sizeable savings and axe thousands of jobs.
The update came one week after Shell posted huge annual losses as the coronavirus pandemic slashed energy demand and prices in 2020.
After lockdowns began to spread towards the end of last year’s first quarter, oil prices dropped off a cliff, even briefly turning negative.
Prices have rebounded sharply however to 13-month highs, levels last seen just before the pandemic took hold.
Shell dived into a net loss of $21.7 billion (18.1 billion euros) last year as factories shut and planes were grounded. The loss compared with a net profit of $15.8 billion in 2019.
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