Shell to review S’pore energy, chemicals assets on Pulau Bukom and Jurong Island

[escveritas]

The Straits Times

LONDON – Shell said on Wednesday it is conducting a strategic review of energy and chemicals assets on Pulau Bukom and Jurong Island in Singapore.

The move was announced as part of the company’s strategy update for investors, aimed at creating more value with reduced emissions.

The Bukom refinery, Shell’s only wholly owned refining-petrochemical centre in Asia, can process 237,000 barrels of crude per day.

Shell will increase its dividend by 15 per cent and boost natural gas production, as new chief executive officer Wael Sawan refocuses on the fossil fuels that drove record profits in 2022. It is part of a pivot by the European oil major to expand the most profitable parts of its business, even if they are carbon intensive, while scaling back ventures that do not make high enough returns. The company reiterated its pledge to achieve net-zero emissions by 2050.

“We will invest in the models that work – those with the highest returns that play to our strengths,” Mr Sawan said. The CEO and his management team will lay out more details of the plan to shareholders at a presentation in New York later on Wednesday.

The first-quarter interim dividend was announced on May 4 at US$0.2875 per ordinary share. The dividend increase will take effect this quarter.

Shell has also committed to buying back at least US$5 billion (S$6.7 billion) of shares in the second half. The company will reduce capital spending to between US$22 billion and US$25 billion a year for 2024 and 2025.

Key to achieving higher returns will be the oil and gas business that drives the majority of Shell’s profits. The company will no longer seek to cut oil production by 1 to 2 per cent annually, having achieved its initial output-reduction plan – announced in 2021 amid a focus on cutting carbon emissions – faster than anticipated.

Shell will now seek to grow its integrated gas business and will stabilise oil output into 2030. REUTERS, BLOOMBERG