Shell considers selling assets in the largest US oil field, Reuters reports, highlighting pressure to focus on low-carbon investments

Royal Dutch Shell Chief Executive Ben van Beurden.

Reuters

• Royal Dutch Shell is reviewing its holdings in the Permian Basin, Reuters reported on Sunday.
• That may mean Shell sells some or all of its 260,000 acres in the oil field, Reuters reported.
• Shareholders and activists have pressured oil corporations to reduce their carbon footprints.
• See more stories on Insider's business page.

Giant oil corporation Royal Dutch Shell is considering shedding some or all of its assets in the Permian Basin, Reuters reported on Sunday, underscoring the pressure Shell and its competitors are under to focus on transitioning to a carbon-neutral economy and combat climate change in the coming decades.

The Netherlands-based company has some 260,000 acres in the southern US oil field, the largest in the country, that could be worth as much as $10 billion, Reuters reported, citing sources familiar with the matter. Shell declined to comment to Reuters.

Shell produces some 160,000 to 170,000 barrels of oil per day in the Permian Basin, upstream director Wael Sawan said on May 25 during a meeting with analysts. Sawan has said that over the last year, the company has lowered its Permian production by some 20,000 barrels a day in an effort to preserve cash.

Shareholders and activists have intensified calls on oil companies like Shell, Exxon Mobil, and Chevron to reduce their carbon emissions in recent years. They have grown louder, and more successful, this year.

Investors' efforts to push for change reached a landmark moment this spring when Exxon shareholders elected to install three new directors on the oil giant's board in a bid to accelerate its shift toward cleaner energies.

Environmental- and social-related shareholder proposals have seen record support this year, according to a report last week by RBC Capital Markets analysts Sara Mahaffy and Lori Calvasina. Just shy of one-quarter of such proposals at US companies have received majority support, up from just 5% in 2019.

Shell earlier this year outlined a plan that included targets like cutting the carbon intensity of the energy products it sells by at least 6% by 2023 and 20% by 2030, compared to 2016 levels.

But its targets were challenged last month when a Dutch court ordered Shell to cut its carbon emissions by an accelerated net 45% by 2030 from 2019 levels. The company called that ruling "disappointing," and said it will focus on its efforts to reduce its carbon footprint.

Shell, led by Chief Executive Chief Executive Ben van Beurden, has also said it believes its annual oil production peaked in 2019 and will likely fall by 1% to 2% a year until 2030.

"The Permian indeed is part of that core position simply because we do see the running room in there, and we do actually believe it is a high-quality position, plus a high-quality operation that we have there," Van Beurden told an analyst during a call in February, referring to the company's strategy in the oil field. "And therefore, we will continue to invest in it until, indeed, it doesn't make sense anymore."

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