#Country Updates #News #Nigeria #Upstream Oil & Gas News

Shell’s green plans under scrutiny as Nigeria’s oil “incompatible” with climate strategy

Royal Dutch Shell Plc has been under increasing pressure from investors to slash emissions and pivot toward cleaner energy, and the tension was on show at its shareholder meeting on Tuesday.

The company’s long-term energy transition plan, laid out to investors for the first time, received overwhelming support, but a competing resolution asking for stricter targets also garnered more votes than ever. Adding to the tension, shareholders were meeting as the International Energy Agency warned that all new oil and gas developments need to stop immediately for climate targets to be met.

Shell also acknowledged its green strategy is complicated by its spill-prone operations in Nigeria, where it has been pumping out oil for half a century.

The Anglo-Dutch company has been gradually selling onshore assets in the West African country for more than a decade, as it sought to put aside chronic problems such as pollution caused by ruptured pipelines and the resulting legal battles with local communities.

The issue has become more acute in the past year after Shell pledged to transform itself into a clean energy giant and gradually wind down its oil and gas business to achieve net-zero carbon emissions by 2050. Adding to the pressure, the International Energy Agency warned Tuesday that new oil and gas field developments globally need to stop immediately for climate targets to be met.

“The balance of risks and rewards associated with our onshore portfolio is no longer compatible with our strategic ambitions,” Chief Executive Officer Ben van Beurden told investors. “We cannot solve community problems in the Niger Delta” and the company has started discussions with the government on how to move forward, he said.

He didn’t say explicitly that Shell wants to sell the remainder of its oil assets in the Niger Delta, nor did he provide a timetable. Yet a full retreat would be an obvious end point to years of gradual divestment. Shell has reduced its total number of onshore licenses in Nigeria by half over the past decade. It would focus on offshore oil fields and gas operations in the country, van Beurden said.

The Nigerian government is in talks with Shell and is encouraging the company to keep its onshore operations instead of divesting, said Timipre Sylva, minister of state for petroleum resources.

Shareholder Criticism

The shareholder meeting was dominated by investors’ questions on Shell’s climate strategy, ranging from pleas to set more ambitious targets on reducing carbon emissions and phasing out fossil fuels, to a request that the company “stop apologizing” for the products it sells.

When asked about a IEA’s new report on stopping new oil and gas fields, Chairman Chad Holliday said Shell hadn’t had time to study the report but would do so in due course.

Shell’s energy transition plans, which see a big expansion in clean energy but also decades more oil and gas production, received nearly 89% votes. A competing proposal from the Follow This group rose to 30%, more than double a year earlier.

“We will seek to fully understand the reason why shareholders voted as they did, particularly those who voted both for Shell’s strategy and for the resolution”, Shell said in a statement. The company plans to “formally report back to investors within six months.”

Source: Furtherafrica

Shell’s green plans under scrutiny as Nigeria’s oil “incompatible” with climate strategy

Leave a comment

Your email address will not be published. Required fields are marked *