BECOMING A NET ZERO SOCIETY - ROYAL DUTCH SHELL CEO - BEN VAN BEURDEN

BECOMING A NET ZERO SOCIETY

Special Feature

Royal Dutch Shell

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Issue 073 · Business Enquirer Magazine

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PROJECT DIRECTED BY

WRITTEN BY

Jamie Waite

Jay Benmehidi

Special Feature

“As a society, we need to keep global warming below two degrees Celsius, and ideally below 1.5 degrees Celsius. That means society needs a net-zero emissions energy system.”

His reputation as a thought leader and oil & gas visionary has been built upon a proven record of delivering results over the course of his career, a notable example of this being how he succeeded in changing the fortunes of the company’s once-struggling chemicals division - once a loss-making enterprise in 2008, the chemicals business now contributes 5% of Shell’s net earnings. Mr. van Beurden also spent a decade of his time with the company in its

B

ernardus ”Ben” van Beurden is the CEO of Anglo-Dutch oil & gas multinational, Royal Dutch Shell. He has given a lifetime of service to the company that he first joined in 1983, after graduating with a master’s degree in Chemical Engineering from Delft University of Technology, the Netherlands.

A Shell executive of 35-years who has held a number of technical and commercial positions in his native Netherlands, the UK, the United States, and Malaysia, Mr. van Beurden is renowned in the

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oil & gas sector for his deep industry knowledge and understanding. From January to September 2013, he served as Shell’s Downstream Director and, prior to this, he was Executive Vice President of Chemicals from 2006 to 2012. During this period, he also served on the boards of a number of leading industry associations, including the International Council of Chemicals Associations and the European Chemical Industry Council. Before this, he held a number of roles in both Upstream and Downstream, including the Vice President of Manufacturing Excellence role.

LNG arm, which has tellingly grown to become an indispensable driver of the group’s growth.

Since being appointed CEO in 2014, Mr. van Beurden has overseen strong financial results, total shareholder returns and earnings per share, and led the company through ending the scrip dividend and the start of a US$25 billion share buyback program. Mr. van Beurden also presided over the acquisition and integration of BG Group, executed an ambitious reshaping of Shell’s portfolio, and successfully completed a divestment programme of US$30 billion of non-core assets, which has the effect of streamlining Shell Group’s operations.

Much as is to be expected of a man who is well-known for his commit-

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Special Feature ment to the battle against climate change, sustainability has also been central to Mr. van Beurden’s strategic objectives, as Shell works to achieve its goal of becoming of a net-zero emissions energy business by 2050.

Van Beurden explained: “As a society, we need to keep global warming below two degrees Celsius, and ideally below 1.5 degrees Celsius. That means society needs a net-zero emissions energy system.

In that context, a company like Shell has a choice.

It can choose to produce oil and gas with the lowest possible emissions. Or it can say: “If society wants to get to net-zero emissions and we really want to be an integral part of that society, then we need to get to net zero as well.”

We, Shell, have decided to go on the second, bigger, mission. It is consistent with our strategy and it fits better with us, as the company and people we are, and with the vision we have for where we want to be.

Royal Dutch Shell Of course, tackling climate change is mainly about the use of energy. Currently, about 85% of our carbon footprint comes from our customers’ emissions when they use our products. That is where the real challenge is. So, we have to have a role in helping our customers decarbonise: a mission of working with society to help it get to net zero. Because it is not good enough to just wait and see what society does. No. To help, we have to shape that journey. I believe that is what our customers, and society in general, have been telling us over the last few years.”

The company’s New Energies division was established under his watch, along with a raft of industry initiatives designed to support the global drive to transition to a lower-carbon future, wish an example of this being the introduction of Shell’s Net Carbon Footprint agenda. In-line with the company’s sustainability drive, Shell is now at the vanguard of the oil & gas industry’s push to markedly lower the greenhouse gas impact of natural gas with the Methane Guiding Principles.

Outside of his work at Shell, Ben is a member of the Advisory Board of the School of Economics and Management Tsinghua University in Beijing, and a member of the International Advisory Council of the Singapore Economic Development Board.

First established in 1907 following the merger of Royal Dutch Petroleum Company and the Shell Transport & Trading Company, Royal Dutch Shell is one of the Big Oil supermajors that dominate the global energy landscape. From its headquarters in The Hague, the Netherlands, the group’s executive leadership oversee an 87,000 strong workforce that is engaged in major oil & natural gas exploration and production projects in over 70 countries around the world, so-as to meet the energy needs of a fast-growing, fast-industrialising global economy.

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Operating through its Upstream segment, through which it explores for, and extracts crude oil and natural gas, develops fields, produces oil and gas, mines oil sands, extracts bitumen, liquifies gas (LNG), and generates wind energy, and its Downstream segment, which includes oil refining into fuels and lubricants, petrochemical production, bio-fuel development, trading, and rental sales, Shell is an indispensable part of the global energy sector. The group’s Downstream organisation serves in excess of 30 million customers at about 46,000 retail service stations every day, and manages different chemicals and products activities as part of an integrated value chain that trades and refines crude oil and other feedstocks into a range of products which are moved and marketed around the world for domestic, industrial and transport use.

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Royal Dutch Shell Naturally, Shell is a name that is synonymous with oil & gas, however in a world which is racing against the clock to tackle the great threat of our time, climate change, the group’s sustainable energy operations are at the forefront of its strategy. The Renewables and Energy Solutions division of Shell is focused on discovering commercial ways to meet the evolving energy needs of the 21st century. Through the provision of cleantech solutions such as hydrogen, wind, and solar, combined with other nature-based solutions and carbon capture and storage methods, and the integration of new clean energy-centric business models, Shell is repivoting its resources and operations in preparation for a sustainable, low carbon future.

Shell is keen to play a leading role in the emerging global hydrogen market, although van Beurden concedes the fuel is unlikely to make a significant breakthrough onto the global energy stage until at least the middle of the decade: “I think governments are really wising up to the idea that hydrogen needs to play an integral role (in the energy transition) because it’s not all going to be electrification. Does it mean that hydrogen

“I think gas will continue to be an important sector going forward. We do believe that growth … is going to be with us for some time and we do believe that gas is not just a bridging fuel but also a destination fuel.”

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will be the next big thing in the next five years?

I don’t think so. But I do believe that those companies who set themselves up to succeed in that area and can make the right type of investments and can seed and develop the hydrogen markets of the future are going to be a long-term business. And we have every intention to be just that.

The “concept” of green hydrogen — green hydrogen is made from renewable energy sources — is starting to come within reach,” he added.

However, oil and gas will continue to play a central role in the global energy mix for a “long time to come,” van Beurden believes, but he said Shell would be selective about where it “puts its money to work”.

“I think gas will continue to be an important sector going forward. We do believe that growth … is going to be with us for some time and we do believe that gas is not just a bridging fuel but also a destination fuel.”