No choice but to invest in oil: Shell CEO

No choice but to invest in oil: Shell CEO

No choice but to invest in oil: Shell CEO

Royal Dutch Shell still sees abundant opportunity to make money from oil and gas in the coming decades even as investors and governments increase pressure on energy companies over climate change, its chief executive said.

Ben van Beurden expressed concern that some shareholders could abandon the world’s second-largest listed energy company due partly to what he called the “demonisation” of oil and gas and “unjustified” worries that its business model was unsustainable.

Shell, which supplies around 3 percent of the world’s energy, set out in 2017 a plan to halve the intensity of its greenhouse emissions by the middle of the century.

Still, the amount of carbon dioxide emitted from Shell’s operations and the products it sells rose by 2.5 percent between 2017 and 2018.

Van Beurden rejected a rising chorus from climate activists and parts of the investor community to transform radically the 112-year-old Anglo-Dutch company’s traditional business model.

“Despite what a lot of activists say, it is entirely legitimate to invest in oil and gas because the world demands it,” van Beurden said.

“We have no choice” but to invest in long-life projects, he added.

Oil and gas remain the backbone of profits for Shell, the largest listed company on London’s main FTSE index.

While oil and gas account for the entirety of Shell’s free cash flow today, it foresees a gradual diversification over the next two decades.

Oil and gas are each still expected to provide a third of free cash flow, however, with the rest coming from power and chemicals.

Shell plans to increase its annual spending to around $32 billion by 2025 from the current $25 billion, with up to one-tenth allocated to renewables and the power business.

Shell has become a focal point of environmental protests, particularly in Europe, with regular demonstrations outside its London headquarters and the British National Theatre dropping Shell’s sponsorship in recent months.

At the same time, investors have sharply increased their scrutiny of companies’ environmental performance.

oil company,