Royal Dutch Shell aims to expand its marketing efforts in Asia and wants 20% of sales from its fuel stations worldwide to come from recharging electric vehicles and low carbon fuels by 2025, the company’s head of refining, trading and marketing told Reuters. The company’s transition to carbon-free energy was also highlighted at a recent event at MIT.
John Abbott, Shell’s head of refining, trading and marketing, told Reuters that Shell, with 43,000 fuel stations in 80 countries, is looking to expand in China, India and Mexico, where it sees fossil fuel growth in the next decade. It’s also investing $2 billion per year in Brazil through 2020.
At the same time, it’s focused on a future with rising demand for alternatives to gasoline and diesel cars. “Shell will be part of leading the de-carbonizing of the energy system. We have to accept that is the way the world is going,” Abbott says.
According to Reuters, electric and hybrid-engine vehicles currently represent only a fraction of the world’s billion-car fleet, but Shell forecasts it will account for 25% by 2040. Abbott says Shell wants about 20% of fuels sold to motorists by 2025 to be low carbon intensity, including biofuels, battery recharging and liquefied natural gas.
Royal Dutch Shell plc is the sixth-largest company in the world, as measured by 2016 revenues, and the largest based in Europe. Its second quarter earnings show a strong rise in cash flows and a net profit rise of 245 percent from $1 billion for the second quarter of 2016.
The British–Dutch multinational oil and gas company is headquartered in the Netherlands and incorporated in the United Kingdom. Shell has operations in more than 70 countries and produces around 3.7 million barrels of oil equivalent every day. It operates four major business groupings:
· Upstream – searches for and recovers crude oil and natural gas and operates the upstream and midstream infrastructure necessary to deliver oil and gas to the market.
· Integrated Gas and New Energies – manages liquefying natural gas, converting gas to liquids and low-carbon opportunities.
· Downstream – manages manufacturing, distribution and marketing activities for oil products and chemicals.
· Projects and technology – manages the delivery of Shell’s major projects, provides technical services and technology capability covering both upstream and downstream activities.
Current major projects include Shell’s floating liquefied natural gas (FLNG) facility that left South Korea and arrived in Australian in July 2017. Once in operation the project will deliver LNG to customers worldwide including the Appomattox deep-water project in the Gulf of Mexico. Ben van Beurden, the CEO of Royal Dutch Shell, told CNBC that the company sees demand for oil has having an end-date.
“Even in the most aggressive scenario, where policies really work at their best, where technology really makes a lot of strides in the near future, oil isn’t going to peak before the late (2020s) or early 2030s, and when it does peak it’s not going to go out of fashion overnight,” he commented. “Supply will shrink faster than demand can shrink, and therefore, working on oil and gas projects will remain relevant for many decades to come.”
Van Beurden supports the transition to cleaner power sources to achieve climate goals to limit global warming to 2 degrees Celsius above pre-industrial levels. “A lot of things are happening when it comes to electric vehicles at this point in time, and that’s all good in my mind,” he said on CNBC. “If you want get to a 2 degrees C future, you have to electrify the more advanced economies even further. So electric mobility has to happen, has to happen fast.”
As consumers shift to electric vehicles, the world will need less oil. Van Beurden cited a personal example—he has traded his diesel-powered car for a Mercedes-Benz S500e plug-in vehicle, while Shell’s CFO drives a BMW i3 electric.
Shell was founded in 1833 as an import business selling seashells and iterated to manufacturing and distributing lamp oil on the world’s first purpose-built oil tanker, the Murex (Latin for a type of snail shell). By 1907 the company had a fleet of ships and adopted a logo based on sea shell Pecten maximus, aka the giant scallop.
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