By Shadia Nasralla LONDON (Reuters) -Royal Dutch Shell set itself tougher emissions cutting targets on Thursday, even as it reported a lower-than-expected third-quarter profit of $4.13 billion. The oil major said it would cut absolute emissions from its operations and the electricity it uses, known as Scope 1 and 2 emissions, by half by 2030 […]
Shell's New Climate Goals and Q3 Profit Shortfall
By Shadia Nasralla
LONDON (Reuters) -Royal Dutch Shell set itself tougher emissions cutting targets on Thursday, even as it reported a lower-than-expected third-quarter profit of $4.13 billion.
The oil major said it would cut absolute emissions from its operations and the electricity it uses, known as Scope 1 and 2 emissions, by half by 2030 compared with 2016.
The company has pledged to become a net-zero emissions company by 2050, but has come under pressure to make faster progress, with a Dutch court ordering it in May to cut all of its emissions – including from the combustion of its products by customers, or Scope 3 – by 45% by 2030.
Shell is appealing the court ruling.
The company previously set a target to cut the carbon intensity of its products, meaning emissions by unit of energy produced rather than in absolute terms, by at least 6% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, compared to 2016 levels.
HURRICANE HIT
As previously flagged, Shell will distribute $7 billion to its shareholders from next year after a $9.5 billion deal to sell its U.S. Permian assets to ConocoPhillips closes.
Its third-quarter adjusted earnings came in below an average analyst forecast provided by the company for a $5.31 billion profit. Earnings were $5.53 billion in the previous quarter and $955 million a year ago.
Shell had previously flagged a $400 million hit to third-quarter earnings from the damage caused by August’s Hurricane Ida in the United States and a boost to cash flows from soaring natural gas and electricity prices.
Gas and power prices surged this autumn as tight gas supplies have collided with strong demand in economies recovering from the COVID-19 pandemic.
Shell’s oil and gas production dropped in the third quarter to 2.08 million barrels of oil equivalent per day (boepd) as a result of the COVID-19 pandemic and hurricanes that forced offshore platforms to shut down.
Oil production fell 4% from the second quarter to 1.49 million barrels per day, while gas output declined 17% to 3.39 million cubic feet per day.
The company guided for its liquefied natural gas (LNG) production to rise to 8-8.6 million tonnes in the fourth quarter.
Shell plans to invest around $20 billion this year, compared with previous guidance for spending to stay below $22 billion.
(Reporting by Shadia Nasralla Editing by Jason Neely and Mark Potter)
