(Corrects to show Shell's emissions peaked in 2018, not 2019,
in paragraph 12)
* Shell oil output peaked in 2018, to reduce gradually
* Emissions peaked in 2019
* Spending on low-carbon to increase
By Ron Bousso and Shadia Nasralla
LONDON, Feb 11 (Reuters) - Energy giant Royal Dutch Shell
vowed to eliminate net carbon emissions by 2050,
accelerating previous targets, as oil production was set to
slowly decline from its 2019 peak.
The Anglo-Dutch company is in the midst of its largest
overhaul yet as it prepares to expand its renewables and
low-carbon business in the face of growing investor pressure on
the oil and gas sector to battle climate change.
In a strategy update, Shell outlined plans to grow rapidly
its low-carbon businesses, including biofuels and hydrogen, but
spending will stay tilted towards oil and gas in the near
future.
It will continue to rely on its retail business, the world's
largest, aiming to increase the number of sites to 55,000 by
2025 from today's 46,000.
It also plans to increase the number of electric vehicle
charging points to 500,000 from 60,000 now.
Shell did not outline any plans to grow its solar and wind
power generation capacity, marking a stark difference from
rivals, such as BP and Total, which both aim to
boost their ownership of physical wind and solar farms.
In the near term, Shell will invest at least $5 billion a
year in what it calls its growth pillar, splitting the
investment roughly in half between its trading and retail
business and renewables units. It previously aimed to spend up
to $3 billion on renewables and marketing combined.
Its upstream business, or oil and gas production, will still
attract a larger share of its budget at $8 billion. It will also
spend $4 billion on its liquefied natural gas (LNG) business and
up to $5 billion on chemicals and refining.
Total spending is expected to remain within a range of $19
to $22 billion per year.
"We will use our established strengths to build on our
competitive portfolio as we make the transition," CEO Ben van
Beurden said in a statement.
NET-ZERO EMISSION
Shell, which said its greenhouse gas emissions peaked in
2018, accelerated its plans to reduce carbon emissions.
It aims to reduce its net intensity by between 6% and 8%
from 2016 levels by 2023. The target rises to 20% by 2030, 45%
by 2035 and 100% by the middle of the century.
The company had previously said it would reduce its net
carbon footprint emission intensity metric by at least 3% by
2022, 30% by 2035 and 65% by 2050 from a 2016 baseline.
Intensity levels represent emissions per unit of energy
produced, technically allowing higher production.
Most European energy majors have set some kind of net-zero
carbon target by 2050.
Shell's ambition differs from BP's in that it also
covers the emissions from the end-use of products other
companies have produced but which Shell sells to customers.
Shell's total carbon emissions, which include its own
production of oil and gas as well as sales of products to
customers, peaked in 2018 at 1.7 gigatonnes. Shell is the
world's largest oil and gas trader.
Oil production is expected to gradually be reduced by 1% to
2% each year from a 2019 peak of around 1.8 million barrels per
day, including divestments of oilfields and the natural decline
of fields.
But it will rely on revenue from its oil and gas division to
pay for shareholder returns and the transition.
(Reporting by Ron Bousso and Shadia Nasralla
Editing by David Goodman and Barbara Lewis)
BP (BP.)
