Renewable generation head at energy supermajor Shell Thomas Brostrom will be leaving the company as Shell CEO Wael Sawan announced a scale back of energy transition plans.
Brostrom joined Shell from offshore wind company Orsted in August 2021 to lead the company’s offshore wind division. His arrival was part of the company’s plans to grow its renewables operations and cut greenhouse gas emissions. Brostrom became head of renewables in early 2022 following the departure of Elisabeth Brinton.
All that was Shell’s plan during the tenure of then-chief executive Ben van Beurden. It all recently changed as the new CEO Wael Sawan decided to pull back on its energy transition plans.
Sawan said during Shell’s Capital Market Day in June that the company would “provide the secure energy that the world needs by investing around $40bn” in its gas and upstream divisions. He did not say that there would be no investments in low-carbon energy and claimed an investment of $10-15bn in low-carbon energy solutions such as biofuels, hydrogen, electric vehicle charging, and CCS between 2023 and 2025.
Sawan also reduced the company’s capital spending to $22-25bn per year for 2024 and 2025. For comparison, Shell spent $25bn last year just for oil and gas and around $4.3bn on low-carbon energy solutions.
Shell also claimed previously that it would be reducing oil production by around 1-2% per year through 2030. Sawan took another turn there and stated that the company “achieved that reduction earlier than expected through targeted divestments and now expects to maintain liquids production at approximately 1.4 million barrels of oil equivalent a day to the end of the decade.”
Another strategic shift was also a different structure of the company which eliminated Brostrom’s role in the company. But he is not the only one to leave as a result of the strategy change.
The team lead of quantitative trading at Shell trading subsidiary Next Kraftwerke Steffen Krutzinna left soon following the Capital Market Day and voiced his displeasure in a LinkedIn post.
“I quit my job last week after Shell revised its strategy. […] I perceive that as a pivotal shift in corporate values, and I feel that short-term profits are above social and environmental responsibilities. I don’t want to be part of that, so I’m out,” Krutzinna said among other things.
One of the possible reasons for Shell’s return to oil could be the massive $59.2bn earnings reported in 2022 by US giant ExxonMobil. The US firm outperformed every oil major even though Shell reported its highest profit in the company’s 115-year history of ‘just’ $39.9bn.
