Shell Says Its Oil Production Peaked, Will Continue to Decline

• Shell looking to become a net-zero emissions energy company

• Goal is net zero by 2050, significant reductions this decade

Oil and gas giant Royal Dutch Shell has announced that the firm’s oil production has peaked, and that it expects production to drop each year going forward. The company said it plans to continue that declining production and work to become a net-zero emissions company by 2050 to transition to new energy and work to combat climate change.

“We must give our customers the products and services they want and need – products that have the lowest environmental impact,” said CEO Ben van Beurden. “At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society.”

Shell first announced last September that it planned to become net-zero by 2050, including both its own products and those it sells, but now it is setting out how it plans to hit those goals, and attempting to reassure shareholders that the company expects to deliver strong returns.

Sticking to the energy side, Shell says it plans to reduce net carbon intensity by 6-8 percent in just two years, 20 percent by 2030, and 45 percent by 2035, using year 2016 as a baseline. It plans to do this through reduced production but is also planning to add more carbon capture and storage, up to 25 million tonnes per year by 2035, including Canadian project Quest.

Shell said that it sold more than 10 billion litres of biofuels in 2019, and is working to increase that level to sell more low-carbon fuels. It is planning to offer 560 TW per year of clean electricity by 2030, doubling current production and enough to power 15 million customers. It also said the company plans to spend $100 million annually supporting new emissions-lowering businesses, though that pales in comparison with the $8B per year it plans to continue investing in oil exploration and pumping. It also plans to expand hydrogen fuel infrastructure.