Shell CEO quits as oil giant turns to climate goals

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LONDON — Shell CEO Ben van Beurden is stepping down at the end of 2022 after nine years at the helm of the energy giant, the energy giant said on Thursday, a change that comes as oil and gas companies are under pressure to away from fossil fuels even as their profits soar. energy prices pushed up by Russia’s war in Ukraine.

Wael Sawan, a Lebanese-Canadian who worked for Shell for 25 years and is now director of integrated gas, renewables and power solutions, took over on Jan. 1. The move signals the London-based company’s desire to play what it calls a leading role in the energy transition despite criticism that it has been slow to reduce emissions linked to climate change.

“I look forward to harnessing the pioneering spirit and passion of our incredible people to tackle the immense challenges and seize the opportunities presented by the energy transition,” said Sawan, a member of Shell’s Executive Committee for three years. .

He takes over at a tumultuous time for Shell and other oil and gas giants. As the world seeks to switch to renewable sources like wind and solar, the war in Ukraine has created volatility that has driven up energy prices and fueled inflation.

Natural gas prices have soared as Russia has curtailed supplies to Europe, where an energy crisis is forcing governments to institute conservation measures and revert to coal and oil despite climate targets to ensure lights stay lit this winter.

Volatile oil prices soared above $120 a barrel in June, pushing gasoline prices at the pump to record highs in the United States. Crude has since fallen below $90.

This has translated into record profits for energy companies at a time when households and businesses are stung by rising costs. Some European governments have approved excess profit taxes on energy companies to help households and businesses, and the European Union’s Executive Commission on Wednesday proposed a similar tax on power producers in the 27-nation bloc.

At the end of July, Shell posted record profits of $11.5 billion for the second consecutive quarter. That figure was up from $5.5 billion in the same three-month period last year, despite a multi-billion hit following Russia’s withdrawal following the invasion of Ukraine.

Ellen Wald, founder of energy consultancy Transversal Consulting, notes that before leading natural gas and renewables, the new CEO was involved in the company’s upstream operations. Despite Shell’s efforts to shift to more renewables, the company still makes most of its money selling and trading crude oil, Wald said.

“It’s not like he’s just a revolving guy,” Wald said. “He’s still an oil and gas specialist, but I think the fact that he was in that (renewables) division before becoming CEO shows how much they see that for the future of the business.”

Shell Chairman Sir Andrew Mackenzie called Sawan “an outstanding leader with all the qualities needed to lead Shell safely and profitably through its next phase of transition and growth”.

Sophie Lund-Yates, senior equity analyst at Hargreaves Lansdown, an investment services firm, called Sawan’s appointment a “clear marker” that Shell intends to make its revolving strategy clearer, even if “the change will not happen overnight. He “will not ignore the fact that oil prices may crash in the near term” and that is “all but guaranteed to be something he will have to navigate,” Lund-Yates added.

Formerly known as Dutch Royal Shell, the company left the Netherlands late last year and consolidated its London headquarters by simplifying its archaic corporate structure. Shell resisted pressure to separate, with one company focusing on renewables and the other on legacy fossil fuels, as other companies have done.

It aims to achieve net zero carbon emissions by 2050 by investing in renewable energy, restoring forests and taking other measures, but it has been accused of moving too slowly.

The Hague District Court last year ordered Shell to cut its carbon emissions by 45% by 2030, saying the company’s net zero target “is not concrete, involves many caveats and is based on monitoring social developments rather than corporate responsibility to achieve a CO2 emissions reduction target.”

“It’s a tricky position for these old European energy companies because they’re facing immense pressure to pull out of their core business, and yet there’s still demand for their commodities, strong demand,” he said. Wald.

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