Shell has appointed Wael Sawan, a 25-year company veteran, as successor to Ben van Beurden, the company’s longstanding chief executive.
Van Beurden, who has led the energy company for almost a decade, is stepping down at the end of the year. Reports of his planned departure emerged earlier this month, and Sawan was considered then the frontrunner to take the top job.
As Shell’s current head of integrated gas and renewables division, Sawan oversees its push into low-carbon energies as well as its giant gas business.
“It’s been a privilege to work alongside Ben and I’m honoured to take over the leadership of this great company from him,” Sawan said. “We will be disciplined and value-focused, as we work with our customers and partners to deliver the reliable, affordable and cleaner energy the world needs.”
Sawan, born in Beirut with dual Lebanese and Canadian nationality, will officially take over as chief executive from 1 January, at which point he will also join Shell’s board.
“The outcome of the board’s managed succession process resulted both in the appointment of an outstanding chief executive and proved the strength and depth of Shell’s leadership talent,” said Sir Andrew Mackenzie, the chairman of Shell.
The appointment of Sawan, who was reportedly one of four internal candidates in the running for the top job, is being viewed as a signal that Shell intends to increase its focus on transitioning to a renewable energy business.
“For a group whose renewable strategy has been somewhat vague, though grand sounding, this is a clear marker that Shell intends to change this,” said Sophie Lund-Yates, the lead equity analyst at Hargreaves Lansdown.
“Change won’t happen overnight, but it’s reasonable to think that at least tweaks to the existing renewable strategy could be on the cards.”
The company’s renewables and energy solutions division, which includes businesses such as renewable electricity generation and hydrogen, accounts for about 12% of Shell’s $23bn to $27bn capital expenditure this year.
However, this division does not include other businesses such as electric vehicle charging and low carbon fuels such as biofuels and sustainable aviation fuels.
Shell has said more than 35% of its operating and capital expenditure this year will be on producing low-carbon energy and non-energy products that reduce emissions – from EV charging and low carbon fuels to chemicals and lubricants – with a plan to increase that to 50% by 2025.
Van Beurden, 64, who has been at Shell for almost four decades, will continue to work in an advisory role to the board until the end of June.
“Ben can look back with great pride on an extraordinary 39-year Shell career, culminating in nine years as an exceptional chief executive,” Mackenzie said. “He leaves a financially strong and profitable company with a robust balance sheet, very strong cash generation capability and a compelling set of options for growth.”
During his time as chief executive he oversaw one of the company’s biggest acquisitions in decades, buying BG Group for $53bn (£46bn) in 2016, which gave Shell a much bigger position in gas that has paid off handsomely as prices have soared, and recently orchestrated the relocation of the company’s headquarters from the Netherlands to London.
Van Beurden has presided over two plunges in Shell’s market value – in 2014 and 2020 – related to sharp falls in the oil market.
However, the energy crisis has proved a boon for oil and gas companies with Shell reporting record adjusted profits of $11.5bn in the three months to the end of June.
Shell’s profits, which has a market value of more than £170bn, beat its previous high – set between January and March – by 26% and were more than double the same period last year.
Van Beurden, who was paid €7.4m (£6.1m) in 2021, warned in August that gas shortages in Europe would probably last several years, raising the prospect of continued energy rationing.
Russ Mould, the investment director at AJ Bell, said: “Van Beurden has managed to navigate the company through some uncertain times as the world went ESG-crazy [environmental, social and governance] and businesses in the oil and gas industry were viewed as toxic entities not fit for the modern world.
“He has helped to steer Shell towards renewable energy while at the same time capitalising on the sudden surge in the oil price as the world emerged from the pandemic and the Ukraine crisis sent ripples through the energy sector.
“His resignation comes as Shell’s share price returns to pre-pandemic levels, illustrating how he has steadied the ship and now seems as good a time as any to pass the baton to a new leader.”
