Shell to invest $10-15 bn to develop low-carbon energy solutions – EQ Mag
Shell is set to provide an update to investors regarding its strategy aimed at generating more value while minimizing emissions. The company aims to deliver higher returns to shareholders through a balanced energy transition.
Shell’s CEO, Wael Sawan, emphasized their commitment to investing in secure energy supplies for the present and future, while simultaneously positioning the company to excel in a low-carbon future. Their approach will be guided by performance, discipline, and simplification, ensuring efficient allocation of capital to enhance shareholder distributions while facilitating the energy transition.
Shell will focus on performance and exercise greater capital and cost discipline, aiming to allocate 30-40 percent of its CFFO (Cash Flow From Operations) through the cycle to shareholders, compared to the previous range of 20-30 percent. This will be accomplished through a combination of dividends and share buybacks.
Starting from the second quarter of 2023, Shell plans to raise the dividend per share by an anticipated 15 percent. Additionally, subject to Board approval, share buybacks of at least $5 billion will be initiated in the latter half of 2023.
While Shell remains committed to providing secure energy supplies, it will actively work towards reducing carbon emissions. The company will uphold its position as a leading player in the global liquefied natural gas (LNG) market and expand its Integrated Gas business.
In the Upstream sector, Shell aims to maintain its advantage by stabilizing liquids production until 2030, ensuring sustainable cash flow.
Leveraging its brand, customer relationships, and trading expertise, Shell will optimize the value of its investments in the Downstream and Renewables & Energy Solutions sectors. The company will also assist customers in the transport and industry sectors to decarbonize.
Furthermore, Shell plans to strengthen its Marketing business and establish leadership positions in low-carbon fuels and electric vehicle charging. It will make disciplined investments in hydrogen and carbon capture and storage (CCS), creating opportunities for the future.
Shell intends to explore low-carbon solutions within its Energy and Chemicals Parks while conducting a strategic review of its assets in Bukom and Jurong Island in Singapore, and enhancing its European footprint. Selective investments in the Power sector will focus on markets where trading activities and customer reach can lead to higher returns, utilizing access to green energy sources to foster growth in low-carbon solutions.
As part of its commitment to reducing emissions, Shell is making substantial progress towards its goal of becoming a net-zero emissions energy business by 2050. This includes reducing emissions from its operations and the energy products it supplies to customers.
The company aims to achieve near-zero methane emissions by 2030 and eliminate routine flaring from its Upstream operations by 2025, surpassing the World Bank’s Zero Routine Flaring 2030 initiative.
Shell plans to invest $10-15 billion between 2023 and 2025 to support the development of low-carbon energy solutions, encompassing biofuels, hydrogen, electric vehicle charging, and carbon capture and storage (CCS).
Source: Reuters
