Hi @Mitchdon
Shell’s Victory field is another. And they only went to FID in Jan 24, so they were obviously completely blind and wrong footed by this idiotic labour policy change. To that extent it gives me some comfort at least that HHR were full steam ahead until the fateful Labour announcement.
interesting read about Shell’s thinking. I read today that electricity demand is expected to increase 50% in the UK by 2035. Good luck avoiding blackouts without gas…
The world is at risk of energy shortages unless more money is invested in drilling for oil and gas, Shell has warned.
The energy giant said global investment in low carbon energy was only half what is needed, meaning the world could be at risk of energy shortages in future unless alternative sources are secured.
The warning came as Shell watered down a key climate pledge to cut its own carbon intensity and pledged a sharp increase in production and sales of liquefied natural gas (LNG).
Separately, the International Energy Agency (IEA) warned that the world was facing a “slight deficit” of oil this year because of surging US demand and continued production cuts from Opec+ countries.
The oil price to a four-month high on Thursday, breaching $85 for the first time since November.
Earlier this week Rishi Sunak announced plans to build new gas power stations in Britain, warning that the country risked blackouts during the transition to net zero without the investment.
Shell chief Wael Sawan said: “The world must achieve an orderly transition away from fossil fuels to low-carbon energy to achieve net zero emissions.
“Today, fossil fuels meet around 80pc of global energy demand, with an even greater reliance in many developing countries. We support a balanced energy transition, one that maintains secure and affordable energy supplies as the world moves to net zero.”
He said expanding LNG production was essential to the energy transition, with Shell planning to boost production from 28 million tonnes to around 39 million tonnes.
Mr Sawan said: “We expect LNG will play a critical role in the transition. It continues to provide a secure supply of energy in many European countries.
“It also offers flexibility to electricity grids as wind and solar power grow, and opportunities to lower carbon emissions from industries such as cement and steel by replacing coal.”
Shell’s decision to ramp up production of LNG, set out in the company’s new Energy Transition Strategy, marks a step back from the green policies drawn up in its last strategy, which was published before the Ukraine conflict disrupted global energy markets.
The company now plans to reduce the “net carbon intensity” of the energy it sells by 15-20pc by 2030. Its previous target had been to reduce the measure by 20pc.
It has also dropped a plan to reduce the net carbon intensity of its energy by 45pc by 2035 because of “uncertainty in the pace of change in the energy transition”, although it still intends to achieve a 100pc reduction by 2050.
The company also announced a new target to reduce the emissions caused when customers use its oil products.
These so-called “Scope 3” emissions will be reduced by 15-20pc by 2030. It is the first time Shell has targeted a reduction in these numbers. The company said it would “support customers as they move to electric mobility and lower-carbon fuels, including natural gas, LNG (liquid natural gas) and biofuels”.
Shell’s new report warns: “Current global investment in low and zero-carbon energy is around $1.7 trillion a year. To reach net zero by 2050, scenarios suggest that $3-4 trillion of commercially viable investment in low-carbon energy is required each year.”
The lack of sufficient investment in low carbon energy means more money must be spent to maintain oil and gas supplies and prevent shortfalls, Shell argued.
“Significant investment will be required to keep supplying oil and gas while low-carbon alternatives are developed and made commercially available.
“This continued investment is needed because demand for oil and gas is expected to drop at a slower rate than the natural decline of the world’s oil and gas fields, which is at 4pc to 5pc a year.”
Shell’s oil products – meaning petrol, diesel and other fuels – released 517 million tonnes of CO2 into the atmosphere last year.
The company also trades in oil and gas produced by other companies. In 2022, the oil and gas fuels it sold, including its own, released a total of 910 million tonnes of CO2 into the atmosphere.
For comparison, the whole UK produced about 400 million tonnes of CO2 in 2023 – less than half of what Shell’s products generated.
The oil major also revealed on Thursday that Mr Sawan was paid a total of £7.9m in his first year on the job. This included a base salary of £1.4m, an annual bonus of £2.7m and a £2.6m long-term incentive payment.
Jonathan Noronha-Gant, senior fossil fuels campaigner at Global Witness, said: “Shell’s CEO million pay packet is a bitter pill to swallow for the millions of workers living with the high costs of energy.
“Our reliance on Shell’s dirty oil and gas make them rich whilst the rest of us get poorer.”
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