Wael: Welcome to Upstream, one of Shell's
three strategic pillars,
Wael: I am Wael the Upstream Director,
Zoe: and I'm Zoe, Executive Vice President,
conventional oil and gas here at Shell.
Wael: The Upstream business plays a critical role in
delivering the oil and gas needed to meet society's ever
growing demand for energy,
Wael: enhancing prosperity and living standards
across the world.
Wael: Our people possess the passion and the capability that
have allowed this for decades to make Shell a
partner of choice.
Wael: Today, as the world's energy system changes,
society expects energy companies to lead the
transition and Upstream will play a fundamental role in
supporting Shell's
ambitious transformation.
Wael: Upstream's robust cash flow is crucial to
support Shell
Wael: and delivering meaningful dividends to shareholders,
and investing in lower carbon energy while responsibly
providing the energy that the world needs.
Wael: To achieve this, Upstream must become
more focused, more competitive and more resilient.
And as we continue to invest in our upstream business, we will
be selective and disciplined in our investment choices.
Zoe: We know we have more work to do to unleash the full
potential of our upstream business.
Zoe: Yet in recent years we've shown we've got the discipline
and determination to do what it takes to improve our business,
to make our operations fitter and leaner.
Zoe: In the last five years alone.
We've reduced unit development costs by around 50%,
Zoe: reduced unit operating costs by more than 25%,
and managed to increase our unit cash flow from operations
by almost 70%.
Zoe: These are significant achievements that we are
really proud of.
Zoe: And of course, they're only possible through
the commitment of our incredible teams and people.
Zoe: It's our people who will implement
Upstream's new strategy.
Zoe: But here are just a few of them to explain how our
portfolio and our business will transform.
Zoe: First up over to Amanda, in The Hague.
Amanda: Thanks Zoe, exciting times!
Amanda: Upstream never stand still, and to meet the
challenge of transformation, we will focus our portfolio to
nine core positions.
Amanda: In the Gulf of Mexico, Permian, Brazil, UK,
North Sea, Nigeria, Kazakhstan, Oman, Malaysia and Brunei.
Amanda: These positions currently generate more than
80% of Upstream's operating cash flow
Amanda: and offer room for growth, with strong
integrated value chains through our integrated gas
and trading businesses.
Amanda: In the future, they will attract roughly 80
percent of upstream capital expenditure and a majority of
upstream human and technical resources.
Amanda: The rest of our portfolio will be managed on a
leaner operating model,
Amanda: to focus on short to medium term value delivery.
Simply put, these assets will either become core positions,
Amanda: be managed for cash or divested.
We will also focus our exploration,
spend and portfolio.
Amanda: By 2025, we will de-risk our existing frontier
position and do not expect any new
frontier exploration thereafter.
Back to you, Wael.
Wael: We will focus our investments on these nine core
positions to support the material cash flow we expect to
generate from Upstream well into the 2030s.
Wael: We also see opportunities to make changes in our
organization and the way we work, to improve cycle
times and deliver better returns while
reducing CO2 emissions.
Wael: Mahamat, over to you.
Mahamat: Thanks Wael.
We are building a leaner, more agile organization with
simplified accountability and less complex projects that
allow us to recoup investment more quickly.
Mahamat: We will standardize and replicate project design to
improve our breakeven price and unit cost reductions, as we've
done in the Gulf of Mexico, where nearly 80% of the Vito
DeepWater platform design has been replicated in
our Whael development.
Mahamat: We will also focus on our
differentiated capabilities, including
unique subsurface data, tools and expertise,
Mahamat: and we will be more disciplined in using the
external market for specialized skills and technologies when
it's more efficient.
Mahamat: Finally, a range of digital technologies will be at
the heart of Upstream's transformation.
Mahamat: They will leverage decades of data, changing the
way we work and enhancing our performance.
Mahamat: This will make our Upstream business a
more competitive, resilient and a rewarding place to work.
Zoe: Upstream aspires to responsibly deliver the energy
the world needs today, while making our business a
compelling investment case.
Zoe: To be a responsible operator means continuing to
power economic progress through the products we offer,
Zoe: while protecting the environment and ensuring
efficient use of natural resources.
Zoe: It also means continuing to raise standards in safety,
ethics and transparency, while rebuilding trust where we
could have done things better.
Zoe: Finally, it means providing lower carbon products
to our customers and the world.
Zoe: Lia, over to you.
Lia: I'm excited by Shell's climate ambition.
Lia: Announcing that we aim to become a net zero emissions
energy business by 2050 or sooner,
in step with society, is something that I'm
very proud of.
Lia: However, our current business plans won't get
us there, so we need to change.
Lia: This means three things for Upstream.
Lia: First, reducing the emissions from our operations
and from the energy we use,
Lia: which will involve eliminating routine flaring by
2030 and reducing methane emissions further.
Lia: Next, reducing the carbon intensity of our portfolio.
Lia: Since 2016, we have reduced the total emissions of
our portfolio operated and non-operated by
about 20 percent.
Lia: Finally, developing carbon capture and storage projects
for our own assets and to help other Shell businesses build
lower carbon energy solutions for our customers.
Wael: The upstream business will deliver the energy of
today while funding the energy of tomorrow.
Wael: We have a compelling investment case,
built on a strategy that will result in a more focused,
more competitive and more resilient business.
Wael: As one of Shell's strategic pillars,
Upstream will play a fundamental role in supporting
Shell's success for years to come.