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Shell plans to cut 15% of the 1,300 jobs in its Low Carbon Solutions business as it scales back some green energy ambitions and focuses on profitable projects including in the oil and gas sector.
The UK-based supermajor plans to eliminate 200 jobs in its Low Carbon Solutions division next year, and is also reviewing the future of another 130 positions in the green energy business, which currently employs around 1,300 people, Shell told Reuters on Wednesday in response to a query.
“We are transforming our Low Carbon Solutions (LCS) business to strengthen its delivery on our core low-carbon business areas such as transport and industry,” Shell told Reuters.
The supermajor will be scaling back its operations in developing hydrogen technologies for passenger vehicles, according to the company, which also plans to merge two of four general manager roles in the hydrogen division.
Earlier this year, Shell laid out plans to raise its dividend by 15%, effective from the second quarter 2023 interim dividend, as the UK-based supermajor pledged to grow its gas business and extend its position in the upstream.
Institutional investors in Europe were disappointed with Shell’s new strategy to continue investing in oil and gas production and selectively pour capital into renewable energy solutions, to the point of some investors considering removing it from their portfolios.
But Shell’s chief executive Wael Sawan has said that reducing global oil and gas production would be “dangerous and irresponsible” as the world still desperately needs those hydrocarbons.
“It is critical that the world avoids dismantling the current energy system faster than we are able to build the clean energy system of the future. Oil and gas WILL continue to play a crucial role in the energy system for a long time to come with demand reducing only gradually over time,” Sawan said on Shell’s Capital Markets Day in June.
By Michael Kern for Oilprice.com
Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,