Shell to Produce Majority of Oil and Gas Reserves by 2050. Plays Down Stranded Assets Risk

Ron Bousso
Thursday, April 15, 2021

Royal Dutch Shell said on Thursday the majority of its oil and gas reserves will be produced by 2050, playing down the risk of stranded assets as it prepares to reduce its greenhouse gas emissions in the coming decades.

The disclosure is a rare admission by a major oil and gas company that some of its reserves may be worthless in a world shifting to renewable energy from fossil fuels in an effort to stem global warming.

The Anglo-Dutch company said in a document to investors summarising its climate strategy that around 75% of its proved oil and gas reserves will be produced by 2030, with an additional 3% produced after 2040.

Since late 2019, Shell has wiped out over $20 billion from the value of its oil and gas reserves after lowering the outlook for commodity prices because of the energy transition and the impact on demand of the COVID-19 pandemic.

Shell had just over 9 billion barrels of oil equivalent in proved oil and gas reserves last year, the equivalent of around 7 years of its 2020 production, its annual report said.

Shell aims to cut its emissions from well-head to petrol station to net zero by 2050, and has set out intermediate targets, in one of the sector's most ambitious plans.

The company said it will focus on hydrogen, biofuels, and offshore wind as well as carbon-sucking technologies and planting trees, but it has yet to outline exact plans for reaching the target.

Its annual spending is however set to stay focused on oil and gas in the coming years.

Shell, the world's largest oil and gas trader, said it sells around 4.6% of energy consumed in the world and produces around 1.4% of total primary energy.

Chief Executive Ben van Beurden said the net-zero strategy is "fully consistent" with the more stringent U.N.-backed goal set in a 2015 Paris conference to limit global warming.

But climate activists and research groups have criticised plans to allow the use of carbon offsets to permit oil and gas reserves to be drained.

The Anglo-Dutch company said it will put its energy transition strategy to a non-binding vote at its annual general meeting in May, an unprecedented move for oil and gas companies, said Adam Matthews, Director of Ethics & Engagement for the Church of England Pensions Board, who has led investor engagement with Shell.

"With this latest important step in Shell's transition from an oil and gas producer to be an energy company, a multi-decadal transition is clearly underway," Matthews said in a statement.

Shell, however, urged investors to vote against a resolution filed by activist group Follow This calling on the company to set a target on the absolute reduction of carbon emissions.

"Shell's medium-term target of a 20% reduction in carbon intensity will not deliver enough absolute emission reductions to achieve the Paris goals," Follow This head Mark van Baal said in a statement.

(Additional reporting by Susanna Twidale and Shadia Nasralla; editing by Barbara Lewis)


Categories: Renewable Energy Emissions Production Renewables Hydrogen Offshore Wind

Related Stories

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

Petrovietnam, Petronas Extend PSC for Offshore Block

INEOS Wraps Up Acquisition of CNOOC’s US Oil and Gas Assets

CNOOC Starts Production at Two New Oil and Gas Projects

All Gas from Conrad’s Mako Field to be Sold to Indonesia’s PLN

Shell Launches Next Phase of Malaysia's Deepwater Project with First Oil Production

CNOOC Brings Online Second Phase of Luda Oil Field Project in Bohai Sea

China's CNOOC Aims for Record Oil and Gas Production in 2025

BP Targets 44% Oil, 89% Gas Increase from India’s Mumbai High Field

Subsea Redesign Underway for Floating Offshore Wind

Current News

MODEC, Sumitomo Partner Up for Delivery of Gato do Mato FPSO

Chuditch Gas Field Up for Summer Drilling Ops as Sunda Reshapes Ownership Structure

EnQuest Bags Two Production Sharing Contracts off Indonesia

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

MODEC Wins ExxonMobil Guyana’s Hammerhead FPSO Contract

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Indonesia Awards Oil and Gas Blocks to Boost Reserves

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

CNOOC Puts Into Production New Oil Field in South China Sea

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com