Yahoo Finance Shell to pump £25bn into UK energy system over next decade
Shell (SHEL.L) has announced its decision to invest up to £25bn ($33bn) in Britain’s energy systems over the next decade after it cut ties with Russia earlier this month.
In a major boost for the UK, the oil and gas giant said it would pump between £20bn to £25bn in response to Rishi Sunak’s Spring Statement, after the chancellor addressed new measures to tackle the ongoing energy crisis.
On Thursday, it pledged that more than 75% of this investment will be geared towards low and zero-carbon products and services. This includes technologies such as offshore wind and renewable hydrogen.
Shell has committed to reaching net carbon emissions by 2050 across its businesses, in line with government targets.
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“These investments, subject to board approval, aim to propel the UK closer to net zero and help to ensure security of supply whilst stimulating economic growth and jobs,” David Bunch, UK country chair, said in a statement on LinkedIn.
“However, Shell cannot act alone. Investing this money requires urgency of action across government to deliver the enabling policy and business case frameworks.
“These must address both the supply and demand side of the energy transition (in areas such as hydrogen and CCS, for example).”
Earlier this week, Shell was reported to be reconsidering a return to its controversial Cambo North Sea project, an oil field 75 miles off the Shetland Islands.
In December last year, the oil major said it was pulling out of the project amid mounting pressure over climate change, pressure from green activists, and potential regulatory delays.
Watch: Shell reportedly reconsidering decision to pull out of controversial Cambo oilfield development
However, the Ukraine war has since sent energy prices soaring, with Brent crude oil (BZ=F) climbing from $70 (£53bn) per barrel before Christmas, to almost double at $139. It is currently trading at $118 per barrel amid fears of reduced Russian supply.
Shell has not yet sold its interest in Cambo, and still holds a 30% stake. This could produce more than 170 million barrels of oil equivalent.
It also comes after Shell, along with other energy firms, attended a meeting with Boris Johnson at Downing Street last week to discuss how the UK can boost its own energy supplies, and cut ties with Russia amid the Ukraine crisis. The PM is set to unveil an energy security strategy as soon as next week.
As at 31 December 2021, Shell had around $3bn in non-current assets in its ventures in Russia.
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