Shell has announced plans to cut costs by billions of dollars while increasing shareholder returns, as the company shifts its strategic focus towards its liquefied natural gas (LNG) business.
In a statement released ahead of its investor event in New York, Shell outlined its aim to reduce costs by between US$5 billion (RM22.1b) and US$7b (RM31b) by 2028 compared with 2022 levels.
This target significantly exceeds the company’s previous cost-cutting goal of US$2b (RM8.8) to US$3b (RM13.3b) by the end of 2025, which had already resulted in hundreds of job cuts in its oil and gas division.
The London-based energy firm plans to expand LNG sales by 4% to 5% annually until 2030 while maintaining a steady level of oil production.
As part of its long-term vision, Shell is positioning itself as the world’s leading integrated gas and LNG company, with its leadership emphasizing that LNG will play a pivotal role in the energy transition over the next decade.
Energy companies have increasingly promoted natural gas as a cleaner alternative to other fossil fuels as global efforts to curb emissions and combat climate change intensify.
In line with this, Shell intends to limit capital expenditure and review its chemicals business, which may lead to partnership opportunities in the United States and selective closures in Europe.
Despite these adjustments, the company has reaffirmed its existing climate targets.
Following the announcement, Shell’s shares rose 1.9% in early trading on the London stock exchange. Market analysts noted that while Shell has made some investments in renewable energy, the company remains firmly anchored in oil and gas, which continue to be its primary profit drivers.
The announcement comes amid a broader industry trend. Last month, British rival BP signaled a major shift back towards its oil and gas operations, moving away from its previously ambitious renewable energy strategy.
Meanwhile, Shell reported a 17% decline in annual profits for 2024, impacted by weaker oil and gas prices and asset write-offs.
