Shell Joins Other Major Peers in Shifting Focus Back to Core Oil and Gas Operations
Shell Joins Other Major Peers in Shifting Focus Back to Core Oil and Gas Operations
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Shell Joins Other Major Peers in Prioritizing Core Oil and Gas Operations
During the CERAWeek 2023 conference by S&P Global in Houston, Texas, Shell CEO Wael Sawan made an announcement that signaled the company's decision to refocus on its primary business of oil and gas production, refining, and sales. This move aligns Shell with its industry counterparts who have also been emphasizing their core operations.
Following a significant court ruling in the Netherlands two years ago, former Shell CEO Ben van Beurden unveiled a plan to not only limit capital output growth to reduce emissions but also actively decrease production by 1-2% annually until 2030. These cuts were planned through the sale of non-core assets and the natural depletion of existing reserves. At that time, the energy transition narrative had gained prominence, promoted by governments, ESG investor groups, and media platforms following Joe Biden's election victory in 2020. The increased emphasis on the energy transition had placed considerable pressure on management teams across various corporations in the industry.
However, Shell's recent announcement signifies a shift back to focusing on its core oil and gas operations. This move raises questions about the dominant position of the energy transition narrative in ongoing energy discussions and debates. The global energy industry currently faces various challenges, including the impact of the pandemic, geopolitical changes, high energy prices, supply chain limitations, and economic instability, contributing to the evolving dynamics in the sector.
