Shell chief Wael Sawan ‘set to scrap oil cut target’ at key strategy meeting

Shell is set to scrap a target to cut oil output when it updates investors on its strategy later this week, it was reported.

Wael Sawan, who took over as chief executive of the oil and gas supermajor in January this year, will tell its capital markets day on Wednesday that Shell will abandon a goal to reduce oil output by between 1% and 2% annually, Reuters reported.

Shell is one of the leading fossil players in the energy transition alongside European peers such as BP.

Shell will make the change after already achieving its target on production through disposals, Reuters added, citing three unnamed sources.

Shell’s plans for the energy transition and its core fossil business are being closely studied amid a wider dilemma for oil and gas companies over where to focus their investments, given a boom in hydrocarbons returns and relatively tight margins in new areas such as offshore wind.

Last week, Shell announced the exit from home retail energy businesses in the UK, Netherlands and Germany citing tough market conditions.

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It is also reported to be considering a sale of its Eolfi floating wind subsidiary.

European energy major’s have already been pulling back on previous transition goals given the unfolding energy crisis following Russia’s invasion of Ukraine in 2022 and higher oil and gas prices.

At the same time, Shell is exploring what could be a game-changing hydrocarbon discovery in Namibia, which analysts have said could have a major influence on the company’s market value and upstream business activities in the years ahead.

Nevertheless, Shell remains one of the most active of the global oil giants in renewables in the energy transition, with major offshore wind projects under way in major markets such as the Netherlands and Scotland, and interests in key emerging sectors such including energy storage.