Shell To Invest $33Bn In UK After Cutting Russian Ties

Shell To Invest $33Bn In UK After Cutting Russian Ties
Shell has announced that it will inject up to $33 billion into the UK's energy system following the company cutting all ties with Russia.

Energy supermajor Shell has announced that it will inject up to $33 billion into the UK's energy system following the company cutting all ties with Russia.

David Bunch, Shell’s UK Country Chair, said via a LinkedIn post that Shell UK was planning to invest between £20 and £25 billion ($26 to $33 billion) into the UK energy system over the next decade.

“More than 75 percent of this will be in low and zero-carbon products and services, including offshore wind, hydrogen, and electric mobility. These investments, subject to board approval, aim to propel the UK closer to net-zero and help to ensure the security of supply whilst stimulating economic growth and jobs,” Bunch stated.

He pointed out that Shell ‘cannot act alone’ and that investing this money required urgency of action across the government to deliver the enabling policy and business case frameworks. These policies, Bunch explained, must address both the supply and demand side of the energy transition in areas such as hydrogen and CCS.

“We will also need a stable political discourse, as I mentioned in my meeting with the Prime Minister and industry leaders last week. We look forward to working together to help the UK secure its future energy supply and move towards its 2050 net-zero target. I will be setting out more detail on Shell UK’s plans on all this in the months ahead,” the UK Chair said.

Shell revealed in April 2020 that it plans to become a net-zero emissions energy business by 2050 or sooner.

It will also include accelerating Shell’s Net Carbon Footprint ambition to be in step with society’s aim to limit the average temperature rise to 1.5 degrees Celsius in line with the goals of the Paris Agreement on Climate Change.

This means reducing the Net Carbon Footprint of the energy products Shell sells to its customers by around 65 percent by 2050 – increased from around 50 percent, and by around 30 percent by 2035 – increased from around 20 percent.

But, in late October, a report by Global Climate Insights claimed that Shell isn’t forecast to achieve its goals after 2022. According to the report, the company’s energy transition strategy “is still materially driven by fuels that will increase emissions, producing a growth strategy that will not truly align with a decarbonizing world.”

Also, Shell recently changed its name from Royal Dutch Shell plc to Shell plc and moved its headquarters to the UK from the Netherlands.

Shell did come under fire after Russia invaded Ukraine over the acquisition of a cargo of Russian crude oil. Ben van Beurden, Shell CEO, said that the cargo buy was not right and apologized. Immediately after, Shell announced its intent to withdraw from its involvement in all Russian hydrocarbons, including crude oil, petroleum products, gas, and LNG in a phased manner.

As an immediate first step, the company said it would stop all spot purchases of Russian crude oil. Shell also noted that it would shut its service stations, aviation fuels, and lubricants operations in Russia as well as not renewing term contracts for crude oil.

To contact the author, email bojan.lepic@rigzone.com


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