Shell to cut oil production by 1-2 % per year in new strategy
Royal Dutch Shell presented a new strategy document up to 2050 focusing on a gradual transition from oil and gas production to gas and energy.

The company’s short-term plan calls for changes in the make-up of its portfolio, investing $5-6 billion annually in growth (about $3 billion for marketing and $2-3 billion on renewables and energy solutions), $8-9 billion on transition (about $4 billion on gas production and $4-5 billion on the chemical sector) and about $8 billion on production.

    According to the strategy document, Shell reached its peak of oil production in 2019 – and forward from that point, production will decline annually by 1-2 %. The reduction will take the form of both divestment of illiquid assets and natural decline.

    The corporation intends to develop LNG production through investment in competitive assets with the aim of adding more than 7 million tonnes of new capacity by the mid-2020s.

    Shell’s plan is to actively boost sales of power, with volumes doubling by 2030 to 560 terrawatt hours per year. It will also develop its hydrogen sector, with the aim of securing double figures by 2030 in terms of world production.

    The company is standing by its plan to achieve zero CO2 emissions by 2050. In accordance with its plan, emissions are to decline by 6-8 % by 2023, 20 % by 2030, 45 % by 2035 and 100 % by 2050.

    Shell pointed out that the maximum level of carbon dioxide emissions was reached in 2018 — a volume of 1.7 gigatonnes per year.

    Under the strategy, Shell will aim to increase its capacity for carbon capture and storage (CCS) by 25 million tonnes a year by 2035. Current large CCS projects, of which Shell plays a part, have a capacity of 4.5 million tonnes, including Quest in Canada (in operation), Northern Lights in Norway (approved) and Porthos in the Netherlands (planned).

    The company’s planned adjusted earnings are $6 billion in 2-25 compared to $4.5 billion in 2020.


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February 2021