Shell says its oil production has peaked and will fall every year
Royal Dutch Shell (RDSA) said its oil production and carbon emissions have peaked as it detailed plans to gradually wean itself off fossil fuels. Climate activists said it hadn’t gone far enough.
The Anglo-Dutch company said in a statement on Thursday that it expects its oil production to decline by between 1% and 2% each year after peaking in 2019. Its total carbon emissions likely peaked in 2018, it added.
Shell unveiled plans in September to become a net zero emissions business by 2050 (including from its own products and those that it sells), joining European rivals BP (BP) and Total (TOT) in making a shift towards clean energy.
The oil giants have written off billions of dollars of assets, spurred on by forecasts that global oil demand may never recover to levels reached before the pandemic, amid permanent changes to how people work and travel and growing concerns about the climate crisis.
Now Shell is setting out how it hopes to achieve its goals. It wants to sell more clean energy, while investing in carbon capture and forestation projects to offset emissions. It will also expand its biofuels production and distribution business.
“Whether our customers are motorists, households or businesses, we will use our global scale and trusted brand to grow in markets where demand for cleaner products and services is strongest, delivering more predictable cash flows and generating higher returns,” said CEO Ben van Beurden.
While European oil companies try to reinvent themselves, America’s ExxonMobil (XOM) and Chevron (CVX) have so far resisted major changes to their businesses. But shareholders are agitating for a shift in direction and there are signs that the pressure may be starting to have an impact.
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