Shell chief says ditching oil production wind-down was not to ‘create a lack of transparency’

Last year’s walk-back of Shell’s staggered oil production cuts was not done to “create a lack of transparency” but to “focus on the key targets that matter,” Shell’s chief executive has said.

In an analyst call following the company’s release of its fourth quarter and full-year results for 2023, Wael Sawan said the decision to u-turn on the 2021 commitment to cut oil production each year for the rest of the decade was not to obfuscate its energy transition efforts.

In fact, Shell said it achieved the target of the cuts within seven months of announcing it because of the $9.5bn sale later in 2021 of its interest in a project in Texas’ Permian Basin.

“The retirement of targets was not to create a lack of transparency but was an intent as we look to tranform Shell into the company we want it to be,” he said.

“To focus on the key targets that matter; both financial and carbon targets.”

Sawan’s comments came as his company delivered $28bn in profits for 2023, down 30 per cent on the previous year but still markedly ahead of analysts’ expectations.

The company’s capital markets day in June last year was the setting for the company’s climb-down on future production cuts.

Today, Sawan said the firm will host an ESG summit in March where investors “should expect real clarity on what areas that we will continue to go forward with and to make clear where we see value opportunities.

“Not a whole bunch of new targets,” he added.

Cash flow from operations (CFFO) was $12.6bn for the fourth quarter; and the total CFFO amounted to $54.2bn in 2023, the second highest year in the company’s history.

Concerning buybacks, the firm announced a $3.5bn programme, which is expected to be completed by its first-quarter 2024 results — due out by early May.