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Royal Dutch Shell is not ‘going soft’ on oil and gas, despite recent investments in cleaner energy and energy solutions—Shell’s core business is and will continue to be oil and gas for the foreseeable future, the supermajor’s chief executive Ben van Beurden said on Tuesday.
Speaking at the Oil and Money conference in London, van Beurden pointed to recent headlines about Shell’s investments in hydrogen, moves into electric vehicles (EVs) charging infrastructure, or an acquisition into the UK power sector, adding this note of caution: “But even headlines that are true can be misleading. They might even make people think we have gone soft on the future of oil and gas. If they did think that, they would be wrong.”
Shell’s spending on new energy solutions may be huge by some standards, at US$1 billion to US$ 2 billion. But this is compared to total annual capital spending of around US$25 billion, the chief executive noted.
It is right to invest in new energies to stay with customers over the long term, but Shell also wants to stay with its customers “right now, next year and for all the years to come until this long-term future becomes reality.”
“We do plan to be at the forefront of change in our industry but we cannot and will not seek to dislocate ourselves from the people who buy our products,” van Beurden said.
“That means Shell’s core business is, and will be for the foreseeable future, very much in oil and gas, and particularly in natural gas. Oil is going to be needed by this world for a long time to come, and gas even more so. And yes, we have made a few big moves into gas,” Shell’s CEO said, arguing the benefits of the LNG market in which Shell is heavily investing.
Shell is also investing in North Sea oil and gas, with the redevelopment of the Penguins field and with the Fram field, van Beurden said.
Although Shell has been investing in renewable energy and cleaner-energy solutions, it has been keeping and will keep its focus on gas and oil. Earlier this year, Shell said that it would move away from oil “when this makes commercial sense.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.