Monday, June 5, 2023

Shell executives resign amid discord over green push

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Royal Dutch Shell has been hit by the departure of several clean energy executives amid a split over the distance and speed with which the oil giant should turn to greener fuels.

The wave of resignations comes just weeks before Shell announces its energy transition strategy. Some executives have pushed for a more aggressive shift in oil, but management is more inclined to move closer to the company’s current trajectory, according to four people familiar with the matter.

Marc van Gerven, who led the solar, storage and onshore wind businesses at Shell, Eric Bradley, who worked in Shell’s distributed energy division, and Katherine Dixon, a leader of its energy transition strategy team, have all left the company recently. weeks.

Dorine Bosman, Shell’s vice president for offshore wind, is also due to leave the company. Several other senior executives in the clean energy side of the company also plan to step down in the coming months, two people said.

Not all movements are known to be related to frustration over the pace of change, but people familiar with the internal debate said there were deep divisions during the dependency reduction period of the company with regard to oil and gas revenues, which had influenced at least some of the departures. frames.

“People are really wondering if there will be any change,” said one of the people familiar with the internal tensions. “Part of the frustration is you see the potential, but the mindset is not there among the top leadership for anything drastic.”

Ben van Beurden, chief executive, said investment in low-carbon companies such as biofuels and solar power “must accelerate”. However, he also said oil will continue to be a huge cash generator and the company will expand its gas division. “There will be a place for our upstream activities for many decades to come,” he recently said at a conference.

The departures are particularly notable as they precede a strategy update in February, when Shell is expected to explain how it plans to become a net-zero emissions company.

European oil companies are under pressure from investors and environmentalists, forcing several – including Shell – to announce promises of net zero emissions. This pressure is now mounting from the company’s own employees.

“I don’t know how we’re going to make the transition without a global change at Shell. We don’t have the culture or the level of flexibility to do it, ”said another person familiar with the internal split. “I wouldn’t be surprised if we see bigger starts.”

In August, Rival BP announced that it would cut oil and gas production by 40% by 2030 as part of its energy transition plan, which analysts say would force Shell to follow the same path. Yet Mr van Beurden told the Financial Times last year his “Only biggest regret” would withdraw prematurely from the oil sector.

Some senior Shell executives are worried about investing larger sums in greener companies that aren’t as lucrative as traditional fossil fuel divisions. They also feel that the business has already moved aggressively and just needs to communicate better.

Still others fear that this will amount to “reorganizing the deckchairs” and Shell risked falling behind its peers to adapt to a future where more people are avoiding hydrocarbons. They note that most of the managers supposed to lead the energy transition come from traditional hydrocarbon backgrounds.

Ms Dixon, who joined the International Energy Agency, said she left the oil company for the Paris-based organization to work on public policy and because the IEA had “incredible potential for lead the global energy transition ”.

Mr van Gerven, Mr Bradley and Ms Bosman did not respond to requests for comment.

A Shell spokesperson said: “We remain firmly focused on driving the energy transition. This means rethinking Shell to enable the implementation of our strategy, to be more agile and more competitive. “


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