Oil and gas major Shell has outlined an overhaul of its company strategy as it bids to take advantage of worldwide electrification.
Today the energy giant holds its annual management day, and amidst a commitment to redistribute some $125 billion to shareholders, Shell also unveiled a reorganisation of its business units in order to position itself for “the future of energy”.
In a “refreshed strategy”, Shell has divided its portfolio into three specific categories which it said would allow the company to drive greater capital allocation and make the company more resilient in the future.
Of those three categories – Core Upstream, Leading Transition and Emerging Power – it is Emerging Power which will be of interest to the power sector, with its purpose to create business models to “meet evolving customer demands” amidst greater electrification.
Shell said it was continuing to develop its power business, indicating that it was seeking new opportunities to grow the business in line with an evolution in consumer demand.
Combined with a commitment to invest an average of $30 billion per year (£23.7 billion) of cash capex between 2021 and 2025, Shell has paved the way for its power spending spree to continue.
Over the past two years Shell has amassed a burgeoning portfolio of clean power subsidiaries and investments, including solar developers Silicon Ranch and Cleantech Solar; EV charging manufacturer NewMotion; battery storage company sonnen, aggregator Limejump and British energy supplier First Utility, which it renamed Shell Energy earlier this year.
Speaking days after Shell confirmed the launch of its flagship brand in the UK’s hotly-contested energy retail market, Shell Energy CEO Colin Crooks said the launch was a “statement of intent” as it looked to trigger a consumer-facing energy revolution.
Ben van Beurden, chief executive at Shell, said the success of its strategy to date had given the company confidence for the future.
“All this adds up to a forward-looking strategy that ensures Shell is well-placed to continue to deliver a world class investment case and thrive in the energy transition,” he said.
