Takeaways from Shell's Energy Transition Strategy report

They are the first energy major to put this for advisory vote by shareholders at the May AGM.

Shells’ Energy Transition Strategy report that is being put for advisory vote by shareholders at the May AGM.

·       For their upstream business – thy note that natural declines are ~5%. Their planned capital investment of $8 bn in upstream for the near term would be well below the investment required to offset the natural decline in production from their reservoirs – and will overall result in a decline of 1-2% in oil production through to 2030 (including divestments)

·       LNG remains part of their transition pillar. They expect to continue with selective investments in competitive LNG assets to deliver > 7 Mtpa of new capacity on-stream by 2025.

Schematic of emissions reduction across their business lines 2019 vs. 2050 presented below.

Shell is relying on six levers for decarbonisation in the short, medium and long term:

■ Pursuing operational efficiency in assets

■ Shifting to natural gas

■ Growing their low-carbon power business

■ Providing low-carbon fuels such as biofuels and hydrogen

■ Developing carbon capture and storage

■ Using nature based solutions (offsets) – where they plan to spend US$100 mn each year in growing their portfolio of carbon credit generating assets.