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So we have sold an asset for 9 Billion Dollars which must mean a reduction on profit. I don't go with the "you don't make much in Shale" as otherwise we couldn't have sold it for such money.
So a simple question......
Why don't you invest the 9 Billion dollars in the renewable or Gas instead of returning it to share holders ??
"Why don't you invest the 9 Billion dollars in the renewable or Gas instead of returning it to share holders ??"
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Isn't that the 69 billion dollar question?
How much will be re-invested & in what, how much will be returned to investors?
Do they have a genuine plan for a 'green' future or is this 'just' a gradual wind down of the business....presumably with lucrative returns to investors & management for a period of time?
BvB's view is that the company in effect borrowed money from shareholders by cutting the dividend last year, as an alternative to stopping investment. Now it's time to repay some of that money.
It's often overlooked that moving into renewables generally requires much less investment than oil and gas projects. Whereas a new offshore field or refinery costs billions, Shell can buy an EV charging company, a solar power business, etc for a few tens of millions. That's one reason why the company's investment in green energy remains quite small compared to fossil fuels. And of course much of this is speculative, with uncertain returns, so as has already been seen in some of the comments on this page, investors don't want Shell to jump in too deep, too early. You could throw $9bn at energy transition projects for the sake of it and get very little back.
In that context I think it makes sense to try to rebuild shareholder confidence and goodwill rather than have large amounts of cash burning a hole in the company's pocket. Shell will invest in renewables, it just takes time to assess what represents a good risk.
Usual disclaimer: these are my personal views not those of Shell, etc.
You could be right but personally I would much prefer that Shell got in much much deeper in Renewables at the earliest stage.
We know that oil will be driven out in the coming decades so it makes sense to spend more now on Green projects to me.
I would also have like to have heard a clear plan for all of the 9 Billion Dollars. Perhaps one third buy backs, one third dividends and invested in Renewable energies.
Also whilst Ben has done a good job I wonder if its time for a change to a new greener CEO….
surely wiping 9 billion off debt pile would be the best option............ I dont see why they dont use these oportunities to become debt free!!
Some good debate IMO. All valid options. Reduce debt, money for investors and 'perhaps' a bigger push into renewables.
I would suggest that you have to be in the renewable business to understand it....even seed money with links to Universities could create a company with potential to grow. The 'danger' is that if you leave the transition too long then more dramatic & expensive decisions may have to be taken....perhaps an investment in Tesla a few years ago would have been too bold a move for Shell but there comes a point when you have to put your cards (& cash) on the table to be taken seriously. A 'green' CEO would be one such bold move...I doubt it will happen (or a similarly bold move), which would probably tells us where Shell is heading short to medium term.
ShellEmployee: Investing in "green projects" such as offshore wind-turbines, onshore solar (PV) farms and so forth ONLY make sense if the the vast majority of the establishment are supporting such. Since all the parties that have seats in the House of Commons are supportive of the "green agenda" and reaching so-called "Net Zero" by 2050 then what your employer is doing is something all sensible employers are doing: not only is the customer always right, the regulator's instructions HAVE to be followed! As long as the politicians want the UK to "go green", then Shell (UK) PLC will be OK. It is when the politicians change direction the problems come! And as all posters to this board know, politicians NEVER take the blame themselves! They ALWAYS find another poor unfortunate to blame! This is PRECISELY why Shell is being lambasted by the green campaigners now! In the 1970s, 1980s and into the 1990s, finding new oil and gas reserves and providing employment in was lauded! This is the problem: You can never win long term with a politician! The ONLY victories are ALWAYS short term ones! Projects that require huge amounts of capital expenditure require a long payback time. This is why there are NO tidal barrage projects undertaken! If the intention is to generate electricity without burning what is know known as "fossil fuels" the cheapest way - in terms of unit cost per KW - is to build a sea wall across the Bristol Channel (not the Severn) as well as Morecambe Bay and the Solway Firth. The UK is blessed with being in a geologically stable area which makes these projects feasible. However this means a long term commitment and politicians don't like long term projects as they want to spend money on things that will get them re-elected! This is why the UK is in the deep hole it is in!
surely wiping 9 billion off debt pile would be the best option............ I dont see why they dont use these oportunities to become debt free!!
Have to agree with that Grippa,borrowing in the future is likely to become much more difficult and expensive for Shell.The share price is nudging upwards slowly so lets reduce this debt pile while the sun is shining and we have the resources to fix the roof.