1/2
June 14 (UPI) — Shell, one of the world’s largest energy companies, announced on Wednesday that it remains focused on delivering returns to its shareholders while actively participating in the energy transition. Despite this, Shell recognizes the enduring importance of fossil fuels in the global energy market.
“Performance, discipline, and simplification will guide our capital allocation decisions, ensuring shareholder distributions are enhanced while enabling the energy transition,” stated Shell’s CEO, Wael Sawan.
The energy transition involves a shift away from fossil fuels towards alternative and renewable energy sources. Shell recently reported significant profits for the first quarter of 2023, primarily driven by its natural gas segment, which generated $4.9 billion. This was closely followed by profits from exploration and production, as well as marketing.
Energy companies have increasingly prioritized shareholder returns over exploration and production activities, which were responsible for the exponential growth of reserves like U.S. shale.
Shell announced plans to raise its dividend-per-share by 5% and allocate at least $5 billion for share buybacks, all while reducing capital spending for 2024 and 2025.
The company plans to invest approximately $40 billion in oil and gas production and another $15 billion in low-carbon solutions by 2035, according to The Guardian. Despite these investment plans for fossil fuels, Shell affirms its commitment to developing a low-carbon portfolio for the future, which includes initiatives like electric vehicles and carbon capture and storage.
“We must continue to create profitable business models that can be quickly scaled to significantly impact the decarbonization of the global energy system,” added Sawan.
In a progress report on Shell’s energy transition, Sawan highlighted that the net carbon intensity of the company’s energy products decreased by 3.8% in 2022 compared to 2016 levels, surpassing the global energy system average of 2%.
However, The Guardian reported that Sawan stated to investors at the New York Stock Exchange that fossil fuels will remain relevant in the global market for the foreseeable future.
In February, Shell faced a lawsuit filed by ClientEarth, an environmental law firm in the UK, for violating their own commitments to an energy strategy aligned with the Paris climate agreement.
