Shell declared its intention to transition towards green technologies and renewable energy sources a few years ago. Oil production was expected to decrease by 1% to 2% annually during the following years as a result of decreased investments in its hydrocarbon portfolio.
Wael Sawan, the organization's new CEO, wants to relaunch Shell. While the company will continue to engage in some green business endeavours, it is no longer prepared to see oil output fall in the near future, not even marginally. The business's current management is also only open to pursuing green projects when they provide lucrative returns; despite the fact that this ought to have been the case during the previous administration as well, it appears that it wasn't.
The company originally had an emphasis on renewable energy which was not profitable, but the strategic focus has shifted back to oil and gas production with the new CEO taking reins of Shell. The restructuring is expected to happen on 1st July, and the head of the renewable business will be leaving the company after less than 2 years. While it is debatable that the shift back to oil and gas is detrimental to the environment and not aligned with their goal of cutting net emissions to zero by 2050, the pivot back to oil and gas has regained investors confidence, considering it is the most profitable segment of the business.
In conclusion, investors were unimpressed by Shell's decision to slash its dividend during the epidemic and had doubts about its investment in green technologies. These investments aren't necessarily terrible, but only makes sense when they're profitable. The new CEO of Shell shares this opinion and has promised to curtail the company's scattershot green initiatives in the future.
https://www.reuters.com/business/energy/shell-pivots-back-oil-win-over-investors-sources-2023-06-09/
[link] [comments] https://www.reddit.com/r/stocks/comments/14vp4c4/shells_shift_in_strategic_focus/
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