Is Shell About To Turn Its Back On The Permian?
Shell may put up for sale all of its acreage in the Permian in the latest step of a low-carbon push that was most recently spurred by a court ruling against the supermajor. A Dutch court ordered Shell to reduce its carbon emissions by 45 percent from 2019 levels by 2030 and start complying with the ruling immediately, as the judge held the company liable for the emissions caused by the use of its products and said its climate policy was not specific enough. Shell has 260,000 acres in the Permian and, according to unnamed sources quoted by Reuters, may sell all of them. The assets accounted for some 6 percent of Shells total oil and gas production in 2020 and, according to the sources, could fetch up to $10 billion. Shell, like all other European oil majors, has pledged to reduce emissions and become a net-zero energy business by 2050 or sooner. Earlier this year, Shell reiterated that its oil production peaked in 2019 and is set for a continual decline over the next three decades. The court ruling, however, has added a new sense of urgency in that undertaking along with a new challenge, because the ruling does not only target Shells own emissions. The ruling of Judge Larisa Alwin also included emissions generated by Shells suppliers and the buyers of its products. Following the ruling, Shell said it would pick up the pace with its energy transition since the ruling came into effect immediately, CEO Ben van Beurden said in a LinkedIn post following the ruling. Still, the company will appeal the ruling as it would necessitate a major and fast reduction in its oil and gas production. The Permian was among Shells nine core basins in the companys energy transition plans, Reuters notes in its report. However, profitability has been hard to come by in the shale patch, which would motivate a decision to sell. By Irina Slav for Oilprice.com  More Top Reads From Oilprice.com: