Shell releases new energy transition plan with huge cut in oil output

London, (Quantum Commodity Intelligence) – Energy major Shell will have produced 75% of its known oil and gas reserves by 2030 and 97% by 2040, the company said in an announcement Thursday, adding that it will reduce the number of refineries it owns and operates over the next decade.

Unveiling its "Energy Transition Strategy", the Anglo-Dutch major said that it will also have used 70% of its "proved plus probable" oil and gas reserves within nine years and 95% by 2040.

The company, which is trying to shift its model away from fossil fuels, is to put its climate transition plan to a vote from shareholders, although it added the outcome of the vote would not be binding.

As part of the plan, Shell will more than halve the volume of traditional fuels it produces by 2030 from around 100 million mt per year to 45 million mt per year.

Instead, Shell will reduce the number of refineries it owns from 13 sites today to six "high-value" chemical and energy parks.

The company's headline carbon reduction target was to achieve net-zero emissions by 2050 while hitting milestones along the way of 20% down by 2030 and 45% lower by 2035, both compared with a 2016 baseline.

The targets encompass scope 1, 2 and 3 emissions which means both the company's operations and the products it sells included within the calculation.

A combination of a switch to low carbon fuels, operational efficiencies, carbon capture and storage, and investments in natural sinks and other natural carbon reduction projects will be used to achieve the net-zero goal, the company said.

The company will publish an update to the transition strategy every three years up to 2050 with a fresh advisory vote taking place every year regarding the company's progress towards its carbon-cutting goals.