RDSA Shell Plc

--Shell plans to spend $2 billion-$3 billion a year on renewables and energy solutions and boost power sales

--The company will continue to grow its natural gas and chemicals business but oil production is set to steadily decrease

--Investments will also focus on carbon capture and storage technology, low-carbon fuels and hydrogen

By Jaime Llinares Taboada

Royal Dutch Shell PLC on Thursday disclosed further details of its green transition strategy, including targets to double electricity sales, expand liquefied natural gas capacity and gradually reduce oil production.

The Anglo-Dutch energy major, which is committed to becoming a net-zero emissions business by 2050, said it will invest between $2 billion and $3 billion a year in renewables and energy solutions and $3 billion in its marketing segment.

Shell also intends to annually allocate $4 billion to the integrated gas business, $4 billion-$5 billion to chemicals and products, and $8 billion to upstream.

The company said it wants to double electricity sales to 560 terawatt hours a year by 2030, and to grow its network of electric vehicle chargers to 500,000 by 2025. Shell is also seeking to expand its lubricants and low-carbon fuels businesses, as well as developing hydrogen hubs and achieving a share of at least 10% of global clean hydrogen sales.

The FTSE 100 group set new targets to reduce carbon intensity by 6%-8% by 2023, 20% by 2030 and 45% by 2035 compared to 2016. It plans to add 25 million tons a year of carbon capture and storage capacity by 2035. Shell confirmed its oil production peaked in 2019 and will gradually decline by 1% or 2% a year.

Shell said it will aim to increase its liquefied natural gas capacity by 7 million tons a year by the middle of the decade, and to increase cash generation from chemicals by $1 billion-$2 billion a year by 2030. However, the company aims to do so while more than halving production of traditional fuels and focusing on circular chemicals, produced from recycled waste such as plastic.

"Whether our customers are motorists, households or businesses, we will use our global scale and trusted brand to grow in markets where demand for cleaner products and services is strongest, delivering more predictable cash flows and generating higher returns," Chief Executive Ben van Beurden said.

The company said it would maintain its dividend policy of increasing payouts by around 4% a year and reduce net debt to $6.5 billion. Shell said in the near-term it would pursue divestments of around $4 billion a year, outpacing underlying operating expenses, and it expects its cash flow to become gradually less exposed to oil-and-gas prices.

London-listed shares at 0832 GMT were down 14.4 pence, or 1.1%, at 1,348.8 pence.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

February 11, 2021 03:51 ET (08:51 GMT)

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