Shell Needs Oil And Gas Money For Finance Its Green Shift

The oil and gas giant Shell’s CEO, Ben van Beurden, has stressed that it would be possible for the company to achieve its net-zero emissions by 2050, but reaffirmed that it would require cash from its oil and gas operations to find the transition.

The idea of separating the company’s historic oil and gas business from its renewables investment was rejected by van Beurden. The company’s activist shareholder Third Point has been advocating that move.

“At this point in time [the cash] comes from our legacy business,” he said in an interview with the BBC.

van Beurden was speaking at Pernis, near Rotterdam, Europe’s largest oil refinery, which he aims to convert from refining gasoline and diesel to producing biofuels and hydrogen over the next decade.

“These things can only be done if you have a facility (like Pernis) to work with and if you have the cash.

“If we have to build a hydrogen plant from a wind farm that we build in the North Sea for a billion dollars that are not going to be funded by a hydrogen business – it will be funded by the oil and gas business,” he said.

However, oil and gas business for the company is more than simply a bygone era. Shell intends to develop additional oilfields, including Cambo in the North Sea, with the goal of producing 170 million barrels of oil.

The measure taken by the company on the Cambo oilfield is finally one taken for the government, according to van Beurden, but also stressed that there is no justification of substituting its resources in the United Kingdom UK resources with foreign imports for meeting demand in the country.

He said: “Why would you say: Let’s not get our oil and gas demands from our own resources but let’s import from somewhere else, probably with a larger carbon footprint.

“I don’t think that it is going to contribute to the balance of payment for the UK and also will not help the carbon footprint of the world.”

If one adds the emissions from customers who use Shell goods, the current global carbon footprint of the company is equivalent to the size of Russia.

Next year, it intends to spend four times as much on oil and gas development as on renewables. This is why some question Shell’s ability to meet both its own standards and those imposed by a Dutch court, which compels it to cut its own net emissions in half by 2030 and completely eradicate them by 2050. Shell intends to challenge a portion of the verdict.

Shell is also obliged to make every effort to minimize its customers’ emissions, which account for 90 per cent of Shell’s entire carbon impact. Shell wants to challenge the court’s decision.

Shell’s investment plans were examined by Shiu Ling Laew of consultancy firm Climate Insights, following which he predicted that the oil company would produce more emissions by 2030 than it does currently as it expands its gas business.

“Even if you’re very generous, and assume they get all the amounts of carbon capture and storage and offsets that they need, they might just miss their 2030 targets, and they will not be able to deliver on 2050.

“In fact, they will be increasing emissions until 2030, and still be producing significant amounts of emissions in 2050,” he says.

(Adapted from BBC.com)

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