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Shell (RDS.A) to Produce Majority of Oil-Gas Reserves by 2050

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In a recently-issued publication, Royal Dutch Shell plc. informed that almost two-third of its oil and gas reserves will be extracted by 2050, lowering the impact of stranded assets as the company plans to minimize greenhouse gas emissions in the decades ahead.

The announcement is an unusual acknowledgment by a supermajor firm suggesting that some of its reserves might be redundant as the world shifts away from fossil fuels toward renewable energy to combat the global warming issue.

In a document to be presented to the company’s shareholders, management said that 75% of its proven oil and gas reserves will be delivered by 2030 while another 3% will be produced after 2040, based on the 2020-end estimates. The Anglo-Dutch company estimates about 70% of its proven plus probable reserves to be generated by 2030 and 5% after 2040.

Shell intends to turn carbon neutral right from its well-head to petrol station within 2050 and has intermediate targets in place in one of the sector's highly-anticipated goals.

In the same report, management informed that it will ask shareholders to vote in favor of an energy transition plan that will align the company's energy goods, services and investments with the Paris Agreement's target and the global fight against climate change.

Shell CEO Ben van Beurden believes that understanding and endorsing the company's strategy is paramount for its shareholders at the moment as its business transformation is on course. The poll will be solely advisory and will not bear any legal ramifications. Shell's board of directors and executive committee will continue to be in charge of developing and authorizing the company's energy conversion plan.

The article outlines the company's objective of attaining net-zero emissions by 2050, in line with the overall society's progress in the direction of Paris Climate Agreement's set goals. Shell's climate priorities, customer-focused decarbonization plan, capital allocation, and approach to climate-related policy and advocacy are also defined in the report.

Company Profile

Shell is one of the primary oil majors, which constitute a group of U.S. and Europe-based energy giants with global operations. The company is fully integrated as it participates in every energy-related aspect, right from oil production to refining and marketing.

Zacks Rank & Other Key Picks

Shell Energy currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the energy space include Matador Resources Company (MTDR - Free Report) , Diamondback Energy, Inc. (FANG - Free Report) and Devon Energy Corporation (DVN - Free Report) , each presently flaunting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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