According to the CEO of Shell, Wael Sawan, reducing oil and gas production would have serious repercussions and be considered "dangerous and irresponsible." Sawan emphasized that the global demand for oil and gas remains significant as the transition to renewable energy sources is not occurring rapidly enough to serve as a complete replacement.

Sawan also expressed concerns about the potential impact of increased energy demand from China and the possibility of a cold winter in Europe, which could drive energy prices and bills higher once again.

These statements from Sawan drew criticism from climate scientists who argued that Shell's plan to continue current oil production until 2030 is misguided, considering the pressing need for substantial climate action.

Professor Emily Shuckburgh, a climate scientist at the University of Cambridge, expressed her belief that companies like Shell should prioritize accelerating the transition to renewable energy instead of advocating for the prolonged use of oil and gas, which fails to serve the best interests of the most vulnerable in society.

Head of the United Nations, António Guterres, recently characterized investments in new oil and gas production as "economic and moral madness."

In response, Mr. Sawan respectfully disagreed, stating that the dangerous and irresponsible course of action would be to curtail oil and gas production, as it would lead to an increase in the cost of living, as witnessed in the past year.

The global community is in a race to abandon fossil fuels in favor of cleaner alternatives, with leaders worldwide committing to limit global warming to below 1.5 degrees Celsius this century.

In 2022, the European Commission presented plans to expedite the EU's transition to renewable energy and reduce dependence on Russian oil and gas.

Many countries face challenges due to insufficient infrastructure to support a shift to more sustainable energy sources.

Impacts of Gas Bidding War and Calls for a Just Energy Transition

Mr. Sawan highlighted the consequences of an international gas bidding war, noting that last year, countries like Pakistan and Bangladesh, unable to afford liquefied natural gas (LNG) shipments, had to go without while the gas was redirected to Northern Europe. This situation led to adverse outcomes, with children in these countries having to study and work in candlelight. Sawan stressed the importance of a just energy transition that benefits all parts of the world, rather than favoring certain regions.

The Committee of Climate Change found a correlation between household gas appliances and respiratory problems and cardiovascular diseases. Claire Fyson, co-head of climate policy at Climate Analytics, an institute focused on science and policy, countered the notion that the choice lies between reliance on fossil fuels or using candlelight, highlighting that renewables are cleaner, more cost-effective, and promote better public health.

Although the UK has committed to investing £11.6 billion in international climate finance, a memo obtained by the BBC revealed that economic shocks, such as the COVID-19 pandemic, have posed significant challenges in meeting this ambitious target.

Fatih Birol, the head of the International Energy Agency, has stressed that governments must cease new investments in oil, gas, and coal if they are genuinely committed to addressing the climate crisis.

Shell CEO Warns of UK's Energy Policy and Taxation Impact on Investment

Shell, a company with a longstanding history and a UK headquarters, expressed concerns over the lack of clarity and stability in the country's energy policy and taxation. According to Mr. Sawan, this poses a risk of deterring investment in the UK, making it less appealing compared to more welcoming countries. The UK has implemented an increase in tax on UK-derived profits from 40% to 75% until 2028, unless oil and gas prices fall below certain thresholds for a sustained period—an outcome most energy experts find unlikely.

Currently, the UK relies on importing over half of its oil and gas, with this proportion expected to rise unless there is renewed investment in the North Sea. In line with this, Shell recently made the decision to sell its stake in the Cambo oil field, a significant undeveloped resource.

Mr. Sawan emphasized the need for the UK government to establish its stance on imported versus domestic production, and highlighted the importance of stability for long-term investments. He also highlighted the warm reception Shell received at a recent investors' meeting held by the New York Stock Exchange, where the company outlined its cost-cutting and profit-maximization plans. Mr. Sawan noted the supportive attitude toward oil and gas companies in the United States, where officials emphasized the value of energy provided by such companies, resonating with his personal experiences coming from Lebanon, a country facing energy shortages.

HQ Move Speculation Raises Concerns

Mr. Sawan acknowledged the possibility of relocating Shell's headquarters and stock market listing to the US, noting that American oil companies command higher share prices. For instance, Exxon Mobil's shares are valued 40% higher than Shell's per dollar of profit.

While Mr. Sawan stated that moving the headquarters is not a priority in the next three years, he did not rule out the possibility for the future. He emphasized his commitment to creating the right circumstances for the company and its shareholders, as his primary responsibility is to shareholder value.

Although Shell currently has no short-term plans to relocate, Mr. Sawan's remarks raise concerns about London's stock market losing its appeal as a venue for multinational companies to raise funds. This follows recent news of Arm Holdings, a prominent technology firm, announcing its intention to shift its primary listing to the US.

A potential move by the UK's most valuable company to the US could significantly impact Britain's financial reputation and potentially result in job losses within the financial services sector.