Fossil fuel giant Shell has been accused of an “utterly destructive” decision as it decided to stop reducing the amount of oil it produces until 2030 as part of a plan it hopes will increase its share price.
The company on Wednesday dropped its plan to reduce oil production by between 1-2% each year of this decade.
It declared victory, saying the target was reached eight years early after it sold off oil fields to others, who will extract that oil instead.
“We have achieved that reduction earlier than expected through targeted divestments,” Zoe Yujnovich, the head of Shell’s upstream business, told Wall Street on Wednesday.
It was part of a wider bid by new chief executive Wael Sawan to hike the share price of Shell, promising markets that the age of fossil fuels was not over, to increase payouts to shareholders and to up profits.
“We haven’t minced our words around this, the world is under-investing,” in oil and gas, he said shortly after finance boss Sinead Gorman proclaimed that “our stock is undervalued”.
Speaking in a room painted in white and gold at the New York Stock Exchange, Mr Sawan said the volatility seen after Russia fully invaded Ukraine showed oil production must remain at current levels.
“I think (this) speaks volumes to the fragility of the overall system and therefore what we need to do is to continue to make sure that while we are continuing to grow – as we must – low carbon investments … you need that investment to be able to at least hold (fossil fuel production) flat, if not grow.”
Shell’s decision sparked widespread criticism as green campaigners warned of the “climate-wrecking” impact it might have on the planet.
Campaign group Global Witness estimated the decision to declare victory on the 1-2% target means Shell could now produce an average 29 million tonnes of extra carbon per year – almost as much as Denmark emits annually.
Shell told the PA news agency it believes those figures, based on data from energy analysts Rystad, to be “nonsense”.
Jonathan Noronha-Gant, senior campaigner at Global Witness, said: “Record profits off the back of the energy crisis should be boosting up green investment.
“Instead it’s shareholder payouts and a doubling-down on climate-wrecking fossil fuels. It will always be profit over people and planet for polluters.”
MP and Green Party co-leader Caroline Lucas said the move is “utterly destructive”.
“Fossil fuel giants like Shell are climate criminals, polluting our planet at will and reaping record profits for their own shareholders,” she said.
Mark van Baal, founder of Follow This, a group of shareholders campaigning for companies to go greener, said Shell is “on a collision course” with the 2015 Paris Climate Agreement, which calls for carbon emissions to almost halve by 2030.
At its New York capital markets day, Shell also made it clear it did not have an advantage in the renewable power sector, saying it had sold sites in Ireland and France.
It is also busy trying to find a buyer for its household energy supplier Shell Energy in the UK and other countries.
Instead, Shell sees some of its renewable future lying in places where it can tap into its traditional business.
For instance, using the benefit of having thousands of forecourts around the world, Shell hopes to grow the number of electric vehicle charging points it owns from 30,000 to 200,000 by the end of the decade.
It appeared to focus largely on urban areas, where drivers might not have the space for a charger at home.
The company also said electric cars can bring other benefits to its old petrol stations. The average electric driver spends around twice as much on food and other items when they wait for their car to load up.
