Shell says band disbandment wouldn’t work in real life
- Activist shareholder Loeb calls for dismantling of Shell
- Q3 adj. profit of $ 4.1 billion lower than analysts forecast
- $ 7 billion in payments to Permian shareholders to start next year
- The new climate target is absolute, not intensity based
LONDON, Oct.28 (Reuters) – Splitting oil major Royal Dutch Shell (RDSa.L) into separate fossil fuel and renewable energy companies could be financially attractive but would not work in real life, the Chief Financial Officer Jessica Uhl.
Activist hedge fund Third Point, which acquired a significant stake in Shell, on Wednesday called on the oil major to split into several companies to increase its performance and market value. Read more
“If you were to break this down into several pieces, I think it might sound like a very interesting financial proposition,” Uhl told reporters.
“But in terms of real solutions, I think it breaks down and our ability to integrate and bring these different pieces of the puzzle together will be how we make a unique difference in the energy transition.”
Shell chief executive Ben van Beurden told reporters that Shell’s strategy is consistent and well understood by the majority of its shareholders.
Bernstein analyst Oswald Clint, who has an outperformance rating on Shell, said in a note that a minority listing of Shell’s marketing activities could make financial sense, but a complete split of the company would hamper future profits.
By widening the wedge with their European rivals over the prospects for renewable energy, major U.S. oil companies are doubling down on their drilling efforts and gaining the support of large investors who don’t expect them to invest in wind and gas. solar. Read more
BETTER THAN EXPECTATIONS
Shell on Thursday reported third-quarter profit of $ 4.13 billion, lower than analysts’ forecasts provided by the company of $ 5.31 billion. It has also set more stringent emission reduction targets for its direct emissions, aiming to halve them by 2030 in absolute terms.
Previously, it only had intensity-based emission reduction targets for this period. Shell’s direct emissions are eclipsed by emissions caused by the combustion of its products by its customers, known as Scope 3.
The company has pledged to become a net zero emissions company by 2050, but is under pressure to progress faster, a Dutch court in May ordering it to cut all its emissions – including Scope 3 – by 45 % by 2030. read more
Shell appealed against the court ruling.
GROWING LNG IN Q4
Gas and electricity prices jumped this fall as strained gas supplies collided with strong demand in economies recovering from the COVID-19 pandemic. ,
This helped Shell’s operating cash flow in the quarter to increase by around 54% year-on-year to $ 16 billion, which in turn helped it reduce its net debt. to $ 57.5 billion, up from $ 65.7 billion in the previous quarter.
The company expected its production of liquefied natural gas (LNG) to reach 8 to 8.6 million tonnes in the fourth quarter.
Reporting by Shadia Nasralla; Editing by Jason Neely, Mark Potter, Barbara Lewis and Christina Fincher
Our standards: Thomson Reuters Trust Principles.