London — Shell expects its oil production to decrease by 1%-2% annually as it prioritizes spending on transition projects in an acceleration of its strategy to achieve net zero emissions by 2050, it said Feb. 11.
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In a strategy update, Europe's largest oil and gas company said it was likely that its oil production had already peaked in 2019 and its CO2 emissions in 2018. The further decline in oil production would result from asset sales and natural decline, it said.
Sketching out its near-term investment plans, it said it expects spending in the traditional upstream segment to fall behind spending in "transition pillar" areas, comprised of the LNG-focused Integrated Gas division, as well as chemicals and oil products.
In the near term, it expects annual upstream capital expenditures of $8 billion, with capex in the transition pillar businesses of $8 billion-$9 billion, and $5 billion-$6 billion of capex in the "growth" business of marketing, renewables and energy solutions.
It also set out interim targets toward the goal of net zero emissions by 2050. Using 2016 as a baseline, it said it would cut its emissions by 6%-8% by 2023, 20% by 2030 and 45% by 2035, before reaching 100% in 2050.
"Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society," CEO Ben van Beurden said in a statement.