* Activist shareholder Loeb called for break-up of Shell
* Q3 adj. earnings of $4.1 bln below analysts' forecast
* $7 bln Permian shareholder payouts to start next year
* New climate target is absolute, not intensity-based
(Adds analyst, investor view on U.S. companies, paragraphs 6,7)
By Shadia Nasralla
LONDON, Oct 28 (Reuters) - Breaking up oil major Royal Dutch
Shell into separate fossil fuels and renewables
companies might be financially compelling but would not work in
real life, finance chief Jessica Uhl said on Thursday.
Activist hedge fund Third Point, which has built a large
stake in Shell, on Wednesday called for the oil major to split
into multiple companies to increase its performance and market
value.
"If you were to split that into component pieces, I think
that can sound really interesting from a financial perspective,"
Uhl told reporters.
"But in terms of real solutions, I think that breaks down
and our ability to integrate and bring these different pieces of
the puzzle together will be how we uniquely make a difference in
the energy transition."
Shell Chief Executive Ben van Beurden told reporters that
Shell's strategy is coherent and well understood by a majority
of its shareholders.
Bernstein analyst Oswald Clint, who has an outperform rating
on Shell, said in a note that a minority listing of Shell's
marketing business might make financial sense, but that a full
split of the company would hamper future earnings.
Deepening a divide with European rivals on the outlook for
renewables, top U.S. oil firms are doubling down on drilling and
winning support from big investors https://www.reuters.com/business/cop/investors-board-us-oil-majors-dismiss-wind-solar-projects-2021-10-27
who do not expect them to invest in wind and solar.
LOWER-THAN-EXPECTED RESULTS
Shell reported third-quarter profit of $4.13 billion on
Thursday, below an analysts forecast provided by the company of
$5.31 billion. It also set itself a tougher emissions-cutting
targets for its direct emissions, aiming to halve them by 2030
in absolute terms.
Previously, it only had intensity-based emissions cut
targets for that time frame. Shell's direct emissions are
dwarfed by the emissions caused by the combustion of its
products through its customers, known as Scope 3.
The company has pledged to become a net-zero emissions
company by 2050, but is under pressure to make faster progress,
with a Dutch court https://www.reuters.com/business/sustainable-business/dutch-court-orders-shell-set-tougher-climate-targets-2021-05-26
ordering it in May to cut all of its emissions - including
Scope 3 - by 45% by 2030.
Shell is appealing the court ruling.
LNG TO GROW IN Q4
Gas and power prices surged this autumn as tight gas
supplies have collided with strong demand in economies
recovering from the COVID-19 pandemic. <LNG-AS>
This helped Shell's cashflow from operations in the quarter
to rise by around 54% on the year to $16 billion, which in turn
helped it to reduce net debt to $57.5 billion, compared with
$65.7 billion in the previous quarter.
The company guided for its liquefied natural gas (LNG)
production to rise to 8-8.6 million tonnes in the fourth
quarter.
(Reporting by Shadia Nasralla; Editing by Jason Neely, Mark
Potter, Barbara Lewis and Christina Fincher)
