Oil & Gas

Shell is set to hold its Capital Markets Day on Tuesday in New York, where analysts expect CEO Wael Sawan to reinforce the company's renewed focus on oil and gas. Shell was among the first European energy majors to shift back to fossil fuels in 2023, maintaining investments in oil and gas while selectively supporting renewable projects. This strategic pivot comes as global demand for hydrocarbons remains strong, and Sawan has emphasized that cutting production too soon would be "dangerous and irresponsible."

Despite maintaining a long-term goal of achieving net-zero emissions by 2050, Shell has relaxed its 2030 carbon intensity target. The company has deprioritized clean power sales to retail customers, instead focusing on cost-cutting and performance optimization. Over the past two years, it has streamlined operations, including job cuts, to improve stock performance, which has lagged behind U.S. competitors ExxonMobil and Chevron.

Shell has outperformed BP in adjusting its strategy, largely due to its earlier return to oil and gas dominance. During the March 25 strategy update, analysts will look for details on how Shell plans to strengthen its core businesses—liquefied natural gas (LNG) and oil production. However, concerns remain over the company’s lower reserves replacement ratio compared to U.S. supermajors, potentially necessitating mergers and acquisitions to sustain long-term growth.

The company remains the world’s largest LNG trader, a segment expected to see significant demand growth. Shell’s annual LNG report predicts a 60% surge in global demand through 2040, driven by Asia’s economic expansion. Analysts will seek clarity on how Shell plans to leverage this advantage while balancing profitability, sustainability commitments, and shareholder returns