Royal Dutch Shell is forging its own path…when it comes to moving away from oil production.
Reuters can now report that, unlike its rivals, Shell is betting on its expertise in power trading and fast growth in hydrogen and biofuels markets…rather than joining rivals in a scramble for renewable energy assets.
Reuters Oil and Gas Corporates correspondent Ron Bousso.
''First of all, Shell is going to put a huge emphasis on its trading capabilities, which are already the world's biggest LNG trading operations and is also going to grow its hydrogen and biofuel businesses significantly over the coming decade because that's where it sees its biggest opportunities and biggest advantages over rivals to capture the big changes that are expected to happen in the energy landscape with the transition to low carbon. On the other hand, Shell is not putting a huge amount of emphasis on growing its own renewable wind power and solar energy generation capacity. Of course, it will grow its renewable footprint, particularly in offshore wind.''
Like its European peers, the Anglo-Dutch company is under pressure from investors and regulators
to slash greenhouse gas emissions and reach net zero by 2050.
But unlike its rivals BP and Total, who are investing heavily in renewables, sources say Shell sees more profit as an intermediary between green energy producers and end customers ... like electric vehicle owners.
It's already the world's biggest energy trader, and aims to increase its spending on low-carbon energy to 25% of overall capital expenditure by 2025.
''And the strategies have been met with kind of mixed reaction from investors, on the one hand welcoming them, because obviously that will be essential to reach the Paris climate agreement goals.But on the other hand, there are a lot of questions of whether the majors, which are companies that have been around for 100, 120, sometimes even longer years, are able to change their model and move from the oil and gas markets into the power markets, where you already have big players that are developing big renewable power businesses. So there's a lot of skepticism about whether these companies will be able to do the transition even with their good intentions.''
Shell will keep its oil and gas production largely stable for the next decade to help fund its energy transition plans, the sources said.
Unlike its rival BP, which committed to slashing its fossil fuel output by 40% by 2030.