Shell CEO Speaks Out Against Anti-Oil Activists

Investment in oil and gas will continue despite growing climate concerns and the “demonization” of the industry simply because the world demands it, the chief executive of Shell, Ben van Beurden, told Reuters in an interview.

Shell has been among the most active Big Oil companies in branching out in new, non-fossil fuel focused directions, including EV charging and renewable energy generation. In fact, Shell has the ambition to become the world’s largest utility in the world, and soon—by 2030.

In the meantime, however, the Anglo-Dutch supermajor will continue investing in oil and gas, and investors need not worry about the long-term prospects of its core business because the demand is, and will be, there.

“Despite what a lot of activists say, it is entirely legitimate to invest in oil and gas because the world demands it,” Van Beurden said. “We have no choice,” he added, referring to long-life oil and gas projects.

Investor concern seems to be focused on these long-life projects such as deepwater field development, chemical plant construction, and LNG plants. These are costly, with the price tag sometimes in the billion-dollar range, and they take years to complete. This means a long-term and expensive commitment on the part of the company, so with the increasingly vocal climate activism, a lot of investors have begun questioning the long-term survival chances of the oil and gas industry and its profitability.

Yet Big Oil is already taking steps to insure itself against any problems in the future. Thanks to the 2014 price crisis, Shell, like its peers, has reoriented its focus towards lower-cost projects that can break even at $20-30 per barrel and are also less carbon-intensive than comparable projects.

“We can sustain an upstream portfolio all the way into the 2030s if there is an economic rationale for doing that and a societal rationale for doing that,” Van Beurden told Reuters. “Fortunately enough, we have more of those than we have money to spend on them.”

 Source: www.energynewsafrica.com