Oil production has already passed its peak, admits Shell as it reveals plans to become carbon neutral in 30 years time
Shell has declared that its oil production has already passed its peak.
In an update to investors labelled ‘Powering Progress’ on how Europe’s biggest oil company plans to be carbon neutral in 30 years time, chief executive Ben van Beurden said production at Shell peaked in 2018 and would fall every year by roughly 2 per cent in the future.
The comments caught some investors off guard given that oil consumption is expected to rise rapidly post the pandemic as life returns to some sort of normality.
Shell chief executive Ben van Beurden said production at Shell peaked in 2018 and would fall every year by roughly 2 per cent in the future
At the same time, prices have risen sharply over the past month and Brent Crude is trading above $60 per barrel having fallen below $20 last year.
Russ Mould, investment director at AJ Bell, said: ‘Shell saying that its oil production has peaked is a major turning point for the business.
‘But there is a growing belief that we’re at the start of a new supercycle for commodities, particularly oil, which has been in the doldrums in recent years.’
The Powering Progress document also outlined how the company has put electricity at the forefront of its strategy to be carbon neutral by 2050.
Unlike rivals BP and Total, Shell has no plans to own wind and solar farms.
Instead it has vowed to have half a million electric vehicle charging points by 2025. It has 60,000 charge points across the UK at present with the UK set to ban the sale of new fossil fuel vehicles by 2030.
Van Beurden said: ‘We must give our customers the products and services they want – products that have the lowest environmental impact.
We will use our global scale and brand to grow in markets where demand for cleaner products and services is strongest.’