Shell plc, a major oil and gas company, is set to reduce its workforce in exploration and development by 20%. This decision comes as part of a broader restructuring plan focused on reducing emissions and improving operational efficiency. The move follows recent reductions in Shell’s renewable and low-carbon energy businesses.
According to reports, the proposed 20% reduction is subject to consultation with employee representatives. This restructuring will affect Shell’s exploration, wells development, and subsurface units, leading to job cuts across the globe. Notably, the impact will be felt in offices in Houston, The Hague, and, to a lesser extent, Britain.
Shell has stated that their goal is to “create more value with less emissions” by emphasizing performance, discipline, and simplification across their operations. As part of this strategy, they aim to achieve structural operating cost reductions of $2-3 billion by the end of 2025.
This announcement is part of a larger trend in Shell’s recent activities. The company has been scaling back operations in offshore wind, solar, and hydrogen, and has divested assets such as retail power businesses, refineries, and certain oil and gas production assets, including those in Nigeria. However, they have also recently announced a joint venture with PetroChina, Arrow Energy, to develop Phase 2 of the Surat Gas Project in Queensland, Australia.
Despite these changes, Shell’s financial performance remains strong. The company reported second-quarter revenue of $74.46 billion, surpassing analysts’ expectations of $61.33 billion. Over the past 12 months, Shell’s stock has risen by approximately 16%. Investors interested in exposure to Shell can consider the Macquarie Energy Transition ETF PWER and the VanEck Natural Resources ETF HAP.
Shell’s restructuring efforts highlight the ongoing challenges and opportunities faced by energy companies as they navigate the transition to a lower-carbon future. The company’s focus on cost reduction and efficiency, while simultaneously exploring new energy opportunities, will be crucial to its long-term success.
