Shell Plc sees a long-term role for natural gas in the global energy mix and aims to expand in key growth markets as Chief Executive Officer Wael Sawan reviews the company’s strategy.
LNG teams are being asked to do more business in China and India, and the company is offering higher bonuses for deals made in those and other target nations, according to people briefed on the plans. the company
Shell will look at investment opportunities for LNG export facilities or long-term supply agreements, according to the people, who asked not to be named because the details are private.
“We have always known that gas is crucial to the energy transition, but our new strategy is based on a new belief: that gas will continue to play a key role in the energy mix,” Cederic Cremers, Executive Vice President LNG at Shell , he said in an internal memo seen by Bloomberg News.
Shell declined to comment. Sawan, who became CEO in January, plans to update investors on Wednesday at a capital market day.
Its plan comes after the performance of Shell’s integrated gas business helped boost first-quarter profits and follows the unit’s record annual performance last year when LNG was boosted by Russia’s decision to cut supply of gas pipelines in Europe. It also comes as the wider sector reevaluates the pace of its shift away from fossil fuels.
Shell will keep oil production flat or slightly higher in 2030, eliminating annual output cuts, Reuters reported last week.
BP Plc is also moving to pump more oil and gas than previously expected in the near term, while Chevron Corp. foresees strong long-term demand for natural gas, rather than a short-term role as a transition fuel to cleaner energy sources.
Sawan has already signaled that Shell will exit businesses that do not produce adequate returns, and the company’s renewable energy division has been told to be more profitable, not just deliver lower carbon emissions.
Some investors and activists have opposed a weakening of climate commitments among the biggest energy producers. Shell’s annual meeting last month was disrupted for more than an hour by protests, including calls for the company to invest more in renewable energy.
Shell’s updated LNG strategy will include additional work with customers to reduce emissions from the fuel through carbon capture and storage, and will also focus on hydrogen, according to the internal memo.
–With the help of William Mathis.
