Shell is currently deliberating how to reconcile energy security with climate targets in a new strategy expected in June, with all options on the table, the supermajor’s chief executive Wael Sawan told The Wall Street Journal in a recent interview.
Whatever the decision of Sawan, other top executives, and the board, Shell is likely to disappoint investors, environmentalists, or both.
“I think the heat will come no matter what I do,” Sawan, the new CEO who took over from Ben van Beurden on January 1, told the Journal.
Shell has to juggle the ‘energy trilemma’ of security of supply, affordable supply, and lower emissions.
Earlier this month, Sawan told The Times that the supermajor’s plan to have its oil production decline by up to 2% each year this decade is currently under review.
Back in 2021, Shell said that its oil production peaked in 2019 and is set for a continual decline over the next three decades as it looks toward the renewables side of the business.
However, the post-Covid rebound in oil and gas demand and the Russian invasion of Ukraine with the subsequent major dislocation of energy the trade have clearly shown “the fragility of the energy system when we starve it of the supply that is required,” Sawan told The Times.
“I am of a firm view that the world will need oil and gas for a long time to come. As such, cutting oil and gas production is not healthy,” Shell’s boss said in early March.
Speaking to the Journal, Sawan said that the company was still discussing production targets and other key strategic decisions.
Last month, the other major UK-based oil firm, BP, said in its latest strategy update that its goal is to produce more oil and gas in the short term in a move welcomed by the market and slammed by environmentalists and some institutional shareholders.
By Charles Kennedy for Oilprice.com
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