Jul 8, 2019

Shell balances conflicting shareholder demands

Royal Dutch Shell has been walking a fine line between investing in its traditional oil and gas businesses while pledging to develop new ones for a low-carbon future. Shell has "Big aspirations" in the electricity sector, Mr van Beurden said at its strategy update last month, but "We are investing with care". Though Shell sees a growing role for cleaner energy forms, its traditional business will still dominate spending plans amid robust global demand for hydrocarbons. Shell will spend $2bn-$3bn on new energies each year between 2021 and 2025. For every environmentalist who will shudder at the thought of Shell not moving away from hydrocarbons, and activist investors who warn of stranded oil and gas assets that ultimately present a long-term threat to their businesses, one equity analyst will be reassured by the Shell executives' admission.

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