Shell maintains oil output levels, sparking outcry

Shell plans to maintain oil production levels until 2030, the British energy giant said Wednesday, triggering an outcry from green campaigners who also slammed a big payout for shareholders.

Shell previously flagged a crude output reduction of between one and two percent per year as part of its carbon neutrality plan unveiled in 2021 and based on 2019 output.

The group said Wednesday that it had already cut average daily liquids production to 1.5 million barrels per day by the end of 2022 — thanks to asset sales.

“Our target of a reduction in oil production by 2030 has not changed. We’ve just met it eight years early,” a Shell spokesman said, adding that in 2021 the company stressed the target would be “achieved by divestments and natural decline” of oil fields.

Shell said it cut output 21 percent from 2019, equivalent to a two-percent annual reduction until 2030.

Major oil and gas firms are seeking to pivot toward cleaner energy and away from fossil fuels, but stand accused of “greenwashing”, or marketing operations as climate-friendly.

Shell rival BP in February said it expected to boost profits by 2030 by investing more in both renewable energy and hydrocarbons, slowing the pace of its own transition.

– Shell climate ‘U-turn’ –

Campaign group Global Witness labelled Shell’s announcement Wednesday as a “climate-wrecking U-turn”, urging it instead to invest far more in cleaner energy.

Shell’s net profit gushed to a company-record $42.3 billion last year as the invasion of Ukraine by key energy producer Russia sent oil and gas prices soaring.

“Record profits, off the back of the energy crisis should be boosting up green investment,” said Jonathan Noronha-Gant, senior campaigner at Global Witness.

“Instead, it’s shareholder payouts and a doubling down on climate-wrecking fossil fuels. It will always be profit over people and planet for polluters.”

Shell also revealed it would pay out at least $5 billion in share buybacks in the second half of this year following bumper profits.

The group will additionally cut capital spending to between $22-25 billion for 2024 and 2025, and slash annual operating costs by $2-3 billion by the mid-decade.

“Performance, discipline, and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions, while enabling the energy transition,” said chief executive Wael Sawan.

Shell insisted that its overall goal to achieve net zero carbon emissions by 2050 remains intact, despite fierce criticism from environmental pressure groups.

“From wildfires in Canada to drought and flooding in East Africa, the effects of climate change are already devastating lives and livelihoods around the world,” Greenpeace UK senior climate advisor, Charlie Kronick, said Wednesday.

“Yet Shell and their competitors remain determined to squeeze every last drop of profit from their dirty oil and gas operations.”

Speaking Tuesday, Swedish activist Greta Thunberg warned that failure to end use of fossil fuels will be a “death sentence” to millions worldwide — and urged politicians to take more ambitious action.

“It will be impossible for us to stick to the 1.5-degree limit without a rapid, equitable, fossil fuel phase-out,” Thunberg told a press conference.

She was referring to the 2015 Paris Agreement, at which world leaders pledged to cut greenhouse gas emissions enough to prevent the Earth’s annual temperature rising by more than 1.5 to 2.0 degrees Celsius, and thus halt runaway global warming.

World oil demand could peak before the end of this decade as the energy crisis has accelerated the transition to cleaner technologies, the International Energy Agency said Wednesday.

The Paris-based agency forecast in its ‘Oil 2023’ medium-term market report that annual demand growth would slow sharply over the next five years, from 2.4 million barrels per day this year to 400,000 bpd in 2028. — Agence France-Presse