In yet another reversal of investments in green energy, supermajor Shell is looking to sell its stake in a major floating offshore wind lease it had won in a consortium two years ago, Bloomberg reported on Tuesday, citing anonymous sources with knowledge of the plans.
In early 2022, Shell and Iberdrola's subsidiary ScottishPower secured joint offers for seabed rights to develop large-scale floating wind farms as part of Crown Estate Scotland's ScotWind leasing. The partners won two sites representing a total of 5 gigawatts (GW) off the east and northeast coast of Scotland. The two companies planned to develop the new wind farms through two joint ventures, MarramWind and CampionWind.
Since early 2022, costs for financing and equipment have soared, while Shell has retreated from some low-carbon and power markets that aren't yielding good returns.
Wael Sawan, who was Shell's Integrated Gas and Renewables and Energy Solutions Director at the time of the floating wind lease win, is now Shell's chief executive and is steering the company to its core business, with investments in green energy carefully selected and high-graded.
Earlier this year, Shell reaffirmed its ambitions to be a net-zero energy business by 2050 but eased its carbon intensity target for 2030 as it has shifted away from clean power sales to retail customers.
Shell also noted that investment in oil and gas would be needed because demand for oil and gas is expected to drop at a slower rate than the natural decline rate of the world's oil and gas fields, which is 4-5% per year.
In the summer of 2023, Shell unveiled its new strategy to continue investing in oil and gas production and selectively pour capital into renewable energy solutions, angering climate activists and some institutional investors.
Shell's CEO Sawan has said that reducing global oil and gas production would be "dangerous and irresponsible" as the world still desperately needs those hydrocarbons.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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