Friday, December 3

Shell boss says no plans to change strategy despite emissions ruling | Royal Dutch Shell

Royal Dutch Shell has no plans to change its strategy despite a landmark Dutch court ruling calling on the company to cut its carbon emissions by 45% by the end of the decade, according to the oil giant’s chief executive.

Ben van Beurden denied that the company has to change its plans to meet stricter climate targets ordered by the court on Thursday, as it revealed a billion-dollar shareholder windfall for Shell investors and quarterly earnings. better than expected.

Shell plans to appeal the court’s ruling, which came shortly after 30% of its shareholders, including some of its largest investors, rebelled against the board’s strategy. They voted for activist investors who want Shell to set firm targets to reduce fossil fuel production.

“I don’t think we can come up with a new strategy,” Van Beurden said. “Our strategy is very much aligned with what the claimants want us to do, which is to work on our own emissions reduction and also help customers reduce emissions.”

Shell plans to reduce the average carbon intensity of the energy it produces by 20% by 2030, well below the court’s ruling.

But Van Beurden said that asking “one company” to cut emissions by 45% when oil industry rivals and EU states plan to achieve only half of these reductions over the same period is “not only unreasonable but doubly ineffective. “

The oil chief also dismissed concerns about Shell’s plan to help private equity-backed Siccar Point explore new UK oil reserves at the Cambo oil field near Shetland, despite warnings from the International Energy Agency that the world cannot afford any new fossil fuel development if it hopes to avoid catastrophic global warming.

“As long as the UK continues to need oil and gas in its [energy] consumption is better produced in your own backyard, ”he said. “Importing oil and gas, which would be the alternative, obviously would not serve the climate at all. Symbolically, it is not what people would like to hear. But symbolism will not help us with climate change. “

The expansion of the Cambo oil field could trigger a legal challenge from Greenpeace against the government arguing that the new exploration would undermine the UK’s climate goals and the recent government promise to allow new oil exploration only if it aligns with the climate goals.

Van Beurden mounted his defense of Shell’s ongoing fossil fuel production as the company increased its dividend by nearly 40% and drove $ 2bn (£ 1.4bn) worth of share buybacks, as rising world oil prices helped drive a sharp rise in quarterly earnings.

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It reported its highest earnings in two years during the three months to the end of June after a steady rise in world energy prices. Its second-quarter earnings rose to $ 5.5 billion from $ 3.2 billion in the same period last year, about 9% more than what was forecast by city analysts.

Van Beurden said the company was “stepping up” distributions to shareholders by increasing dividends and driving share buybacks “while we continue to invest for the future of energy.”

“We wanted to be really clear and convey to the market the confidence we have in our prospects and our cash flows.”

Despite shareholder sweetener, Shell’s share price remains well below where it traded before the Covid-19 outbreak, even as the price of oil has recovered to pre-pandemic levels. Despite rising Thursday morning, the stock only rose as high as 1,432 pence, compared to just over 2,298 pence in January 2020.

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