Despite its long-term plan to move away from fossil fuels, Shell revealed that it will keep its oil production steady in a notice to investors on Wednesday.
Investors were pessimistic about Shell after it planned to shift to replace its bread-and-butter oil and gas business with renewable and low-carbon energies, according to Reuters. CEO Wael Sawan, who took over the company in January, is looking to boost investor confidence after some expressed concerns that the company was moving away from its most profitable businesses.
“Today, Shell also confirms it will: Grow its leading Integrated Gas business and maintain leadership in the global liquefied natural gas (LNG) market,” the company said in a press release.
After committing to a 1-2% decrease in oil investment per year, Shell is scrapping that plan in an attempt to restore faith from stockholders, as reported by Reuters. This new recommitment will allow the company to increase payments to its shareholders from 20-30% of cash flow from operations to 30-40%, the outlet reported.
“We will invest in the models that work – those with the highest returns that play to our strengths,” said Sawan.
Shell has also recently ditched multiple clean energy plans. The new CEO scrapped projects including offshore wind, hydrogen and biofuels because of weak performance predictions, Reuters reported. Despite all this, Shell says it is committed to slashing carbon emissions. The company plans to have near zero methane emissions by 2030 and net-zero emissions by 2050, according to a Shell press release.
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