The boss of Shell has warned that slashing oil and gas production now would be “dangerous and irresponsible” and could see energy bills rocket higher again.
Chief executive Wael Sawan told the BBC the world still “desperately needs oil and gas” because the switch to renewable energy is not happening fast enough to replace it.
He cautioned that energy bills could be sent soaring back towards last year’s highs if production is cut amid increasing demand from China and if we see another cold winter across Europe.
Sawan said: “What would be dangerous and irresponsible is cutting oil and gas production so that the cost of living, as we saw last year, starts to shoot up again.”
He also did not rule out moving Shell’s UK headquarters and stock market listing to the US in the long term.
While Sawan said a relocation for the FTSE 100 listed giant was “not a priority for the next three years”, the comments add to fears that the London stock market is becoming less attractive to multinational companies after tech group ARM Holdings recently announced plans to move its primary listing to the US.
Shell recently sparked widespread criticism after announcing a move to stop reducing the amount of oil it produces until 2030.
Green campaigners slammed the group’s move as “utterly destructive” after it dropped its plan to reduce oil production by between 1% and 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, with the controversial decision also coming as part of a plan to boost its share price.
Sawan said poorer countries were at risk of being left behind in the transition to renewable energy, as they do not have the infrastructure to support it.
He said countries such as Pakistan and Bangladesh were unable to afford Liquid Natural Gas (LNG) shipments in the bidding war for gas in last year’s crunch.
“They took away LNG from those countries and children had to work and study by candlelight,” he said. “If we’re going to have a transition it needs to be a just transition that doesn’t just work for one part of the world.”
Shell also cautioned that the higher taxes on profits made by oil and gas firms in the UK and the lack of clarity on energy policy risked making the UK a less attractive country in which to invest.
“When you do not have the stability you require in these long-term investments, that raises questions when we compare that to other countries where there is very clear support for those investments,” Sawan said.
On possible plans to move its HQ to the US, where oil firms have far higher valuations for their shares, he said: “There are many who question whether that valuation gap can only be bridged if we move to the US; a move of headquarters is not a priority for the next three years.”
He added: “I would never rule out anything that could potentially create the right circumstances for the company and its shareholders, ultimately, I am in the service of shareholder value.”
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