New Shell boss Wael Sawan slams brakes on going green

Shell’s new boss yesterday slammed the brakes on its green makeover with a plan to stop shrinking oil production and ramp up natural gas volumes.

Wael Sawan, who took over as chief executive in January, also pledged to boost returns to investors and cut spending to win back the confidence of the market.

But the move outraged climate activists who said Shell was ‘doubling down on climate-wrecking fossil fuels’.

In an update ahead of an investor day in New York, Shell said it would increase shareholder distributions to between 30 per cent and 40 per cent of the cash flow from its operations, up from its previous target of 20 per cent to 30 per cent.

It also pledged to buy back at least £3.9billion worth of its own shares in the second half of this year and to cut spending to £17billion-£20billion annually from its current level of £18billion-£21billion.

Dividend boost: Shell said it would increase shareholder distributions to between 30% and 40% of the cash flow from its operations, up from its previous target of 20% to 30%

Shell said its oil production would be maintained at close to current levels, which would help ‘extend its advantaged position’ in the market.

It also said it would grow its natural gas business.

It marked a shift from two years ago when then-boss Ben van Beurden said oil production would decline by between and 1 per cent and 2 per cent a year this decade from a peak in 2019, implying output would fall to around 1.5m barrels of oil per day by 2030.

Now, however, it says it has already fallen to this level and will soon dip to 1.4m.

And, having met its target, it is not making further cuts.

However, Shell reiterated its aim to become a net-zero company by 2050 and invest £8billion-£12billion over the next two years in low-carbon energy.

‘We are investing to provide the secure energy customers need today and for a long time to come, while transforming Shell to win in a low-carbon future,’ Sawan said.

‘We want to play to our strengths.’

Shake-up: New Shell boss Wael Sawan has pledged to boost returns to investors, cut spending and win back the confidence of the market

Jonathan Noronha-Gant, senior campaigner at activist group Global Witness, said Shell’s profits ‘should be boosting green investment’ but were instead being used for ‘shareholder payouts and a doubling down on climate-wrecking fossil fuels’.

‘It will always be profit over people and planet for polluters,’ he added.

The decision to increase shareholder returns and production comes as Sawan looks to boost the company’s value, which has lagged behind US rivals such as Exxon Mobil and Chevron.

The event in New York is part of his plan to attract more US investors, and follows a record £32billion profit last year after energy prices surged following Russia’s invasion of Ukraine and caused many fossil fuel giants to rethink their previous commitments to renewable energy.

Earlier this year, rival BP scaled back its climate change targets.