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Shell to cut up to 10pc of workforce by 2022: Update

  • Market: Crude oil, Natural gas
  • 30/09/20

Adds details from internal document

Shell expects to cut up to 9,000 jobs by the end of 2022, more than 10pc of its workforce, as part of a structural reorganisation to shift towards a low-carbon future.

"We have to be a simpler, more streamlined, more competitive organisation that is more nimble and able to respond to customers," chief executive Ben van Beurden said. "We have too many layers in the company: too many levels between me, as the CEO, and the operators and technicians at our locations."

The firm will look to cut between 7,000-9,000 jobs over the next two years. Shell will reduce the number of jobs in the top three layers of the company by nearly a fifth, van Beurden told employees in an internal document seen by Argus.

The total job cuts include around 1,500 people who have already agreed to take voluntary redundancy this year, but they exclude those who leave Shell because of divestments. Shell had a workforce of 83,000 at the end of last year. It said the redundancy programme, combined with other measures, should save $2bn-2.5bn/yr by 2022.

Earlier this year Shell cut its dividend for the first time since the 1940s, partly in preparation for the energy transition shift, saving it $10bn this year and reducing the need for urgent redundancies. But the firm said today that it plans to make its traditional business more focused as part of a low-carbon future. It has already announced plans to become a net-zero emissions energy business by 2050 or sooner.

"We will continue to invest, but it will not be about how many barrels of oil, or cubic feet of gas, [the] Upstream [business] produces, but how much it adds to the bottom line," van Beurden said. "Upstream will be critical to Shell as we change — we need it to be very successful, so we have the financial strength to invest further in our lower-carbon products."

Shell is seeking to sell five refineries to reduce its fleet to fewer than 10, and plans to grow its integrated gas business. The new "reshaped Shell" will be set up with a strong focus on helping customers decarbonise in sectors such as aviation, shipping and road transport, van Beurden said. "We have to change the type of products that we sell."

Shell plans to establish a "sectors and decarbonisation" business in its downstream segment, according to the internal document. And it plans to integrate a number of departments under one structure. For example, IT, digital and data capabilities will move into the projects and technology organisation.

Shell's decision to reduce its workforce follows in the footsteps of competitor BP, which announced in June it would cut 14pc of its global workforce — around 10,000 jobs — as a result of the oil downturn brought on by Covid-19 and citing the energy transition. Shell plans to complete a detailed design of the company by early January 2021, and for the reshaped firm to become fully operational by 1 July next year.

By Rowena Edwards


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17/03/25

Carney to strike while iron, steel and aluminum are hot

Carney to strike while iron, steel and aluminum are hot

Calgary, 17 March (Argus) — Newly minted Canadian prime minister Mark Carney will likely call a national election soon to both secure his seat in Canada's parliament and win a public mandate in the ongoing trade war with the US. Carney has helped revive the Liberal party's fortunes and narrow the gap between main rival Conservative leader Pierre Poilievre in recent weeks, raising the odds he will call for a national election soon. Poilievre has lost momentum because of rising anti-US sentiment in Canada while the governing Liberals have capitalized on newfound attention in what many in the country see as a fight against US president Donald Trump. An election would occur 37-51 days after being called, meaning Canadians could go to the polls as early as late-April. Because Carney did not hold elected office when his party chose him to succeed Justin Trudeau, he must also find a parliamentary seat to run for in the election. At the same time voters will be voting on all other seats in parliament, essentially putting the Liberal party's nine-year run leading the country in the balance. Parliament has been out of session for several months after Trudeau asked for an extension of a regular recess while his party chose a new leader. It is scheduled to return on 24 March although Carney could ask to extend it again. If it does return to session, Carney will be without a seat and unable to defend himself against Conservative attacks in the House of Commons. Until then, Carney will continue to lead Canada's response to the US-induced trade war, which has included tariffs on energy and a wide range of other imports imposed then removed earlier this month, as well as ongoing tariffs against steel and aluminum imports. A tight contest A virtual tie in the polls for Canada's two largest federal parties promises a tight race for the expected spring election where Carney will try to shake unpopular policies from Trudeau's time — some of which Carney had formerly endorsed — while addressing louder calls by Canadians for exporting energy to non-US countries. Both parties appear to like their chances, but the US-Canada trade war has meant Liberal ministers leading important areas of policy are dominating national media, leaving Poilievre searching for airtime. Poilievre warns voters that Carney is an out-of-touch elitist similar to his close ally Trudeau. Carney, who has held prominent roles in banking and on corporate boards, counters he has "actually worked in the private sector" while characterizing Poilievre as a lifelong politician. But Carney still knows he must distance himself from Trudeau. He began that process last week by using his power to eliminate the consumer carbon tax , beating Poilievre — who has been calling for this for years — to the punch. Diversifying trade, inter-provincially and internationally, is top of mind for both leaders, but the Liberals still seem reluctant to talk about oil pipelines, aside from the recently expanded and federally-owned 890,000 b/d Trans Mountain system. The system has provided flexibility for crude exporters looking to bypass the US and is now seen in a new light by many outside of the industry amid the trade war. Canada will be a superpower in "both conventional and clean energies" by creating new trade corridors with "reliable trade partners", Carney said on 14 March. But the country's largest oil producing provinces have their reservations. "Mark Carney is responsible for net zero banking," Alberta premier Danielle Smith said last week at the CERAWeek by S&P Global conference in Houston, Texas. "He's been on a war path against the energy industry his entire career." Saskatchewan premier Scott Moe meanwhile urged Carney to cancel this week's visit to Europe, his first international trip as prime minister, and instead prioritize escalating trade wars with both the US and China. "There are higher stakes at play here," Moe said. "We don't have a trade war with the European Union today." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Energean-Carlyle gas assets deal under threat


17/03/25
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17/03/25

Energean-Carlyle gas assets deal under threat

London, 17 March (Argus) — Greek independent Energean has said a deal to sell its gas assets in Egypt, Italy and Croatia to US private equity fund Carlyle may collapse owing to incomplete government approvals. Carlyle has still not received certain regulatory approvals from Italy and Egypt and has only three days left do so under the terms of the original agreement, Energean said. Energean said it has been unable to agree with Carlyle to extend the deadline beyond 20 March. Carlyle had agreed to pay up to $945mn for the assets , which it expects to produce 47,000 b/d of oil equivalent. The collapse of the deal would throw into doubt Carlyle's plan to set up a Mediterranean-focused exploration and production company led by ex-BP chief executive Tony Hayward. For Energean, the deal was set to help pay down debt and focus its resources on Israel and Morocco. The company said it is still committed to closing the transaction. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump actions fuel trading uncertainty


17/03/25
News
17/03/25

Trump actions fuel trading uncertainty

Boca Raton, 17 March (Argus) — President Donald Trump's unpredictable actions on tariffs, foreign affairs and the economy are creating volatility in futures markets at a time of increased concerns about the stability of investments made in the US. Trump has roiled global markets by announcing — and sometimes retracting the same day — tariffs on Canada, Mexico, China and other trading partners without offering a clear explanation of what outcome he hopes to achieve. The Chicago Board Options Exchange's VIX volatility index, which uses options trades to track the likelihood of major stock market swings, has nearly doubled since Trump took office and hit a seven-month high last week. The pace and breadth of Trump's agenda are "surprising even his most ardent supporters" and resulted in markets having "mixed feelings" over his policies, Futures Industry Association president Walt Lukken said on 10 March at the International Futures Industry Conference in Boca Raton, Florida. According to a recent survey, the industry group's members identified tariffs as the top policy that could negatively affect markets, Lukken said. Trump's oft-stated desire to annex Greenland and Canada and his willingness to allow carmaker Tesla's chief executive, Elon Musk, to exert vast power in his administration without a clear conflict-of-interest policy have helped rattle investor confidence, European exchange Euronext chief executive Stephane Boujnah said on the sidelines of the conference. US assets could start trading at a discount because of concerns over the rule of law and an "oligarch risk" that usually exists in emerging markets, he said. "One of the features of the emerging market is that you invest, you own something, until the guy with gold who is close to the ruler wants it too," Boujnah said. Traders who in the past might have stayed away from markets during periods of volatility no longer have the "luxury to do that in the world that we live in today", CME Group chief executive Terrence Duffy said. "Globally, it's not going to go away, so it's something we all need to deal with," Duffy said. CME reported record trading volumes for natural gas futures and options in January and February, which company executives have attributed in part to years of growing US energy exports. "As the US continues to both produce and export crude and natural gas at record quantities, putting US physical products on the market, customers are coming to the main market to hedge that exposure," CME commodities global head Derek Sammann said on the sidelines of the conference. Double-edged sword Higher volatility can benefit exchanges, trading platforms and traders because their revenue is often tied to trading volumes. But too much volatility in markets can cause some traders to sit on the sidelines, resulting in increased price spreads between buyers and sellers, trading platform Trading Technologies executive vice-president of futures and options Alun Green said. "We're still in a well-established, well-worked volatile market, but I think that there are some areas where people are not quite as willing to go in and take risks," Green said. Trump's push for an across-the-board cut to regulations and his attempt to wrest control of the independent federal agencies that oversee financial markets could end up causing problems in markets if they eventually result in a market crash, according to some regulators. "I do fear sometimes when we whipsaw too much, that then things can get deregulated too much, and then we create some amount of risk that we then can't handle," US commodities regulator CFTC member Christy Goldsmith Romero, a Democratic appointee, said. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US oil chiefs wary of Trump price push


17/03/25
News
17/03/25

US oil chiefs wary of Trump price push

New York, 17 March (Argus) — US oil chiefs have offered President Donald Trump their unequivocal backing for restarting the conversation around energy policy and climate change in their favour, but his push for lower oil prices is creating misgivings. Energy secretary Chris Wright told reporters at the CERAWeek by S&P Global conference in Houston last week that the administration's push for lower oil prices has no specific target level, but White House officials, including trade adviser Peter Navarro, have cited $50/bl as a preferred level that would help to bring down inflation. A decline to that level would have far-reaching repercussions for the shale patch and lead to lower production in the top-performing Permian basin, according to industry veteran Scott Sheffield. "The cash breakeven for the majors and independents is $50-55/bl including dividends," said Sheffield, one of the pioneers of the shale revolution in the Permian basin that turned the US into the world's biggest producer. "So at $50/bl oil, there's no free cash flow, there's no growth." Wright attempted to square the circle between Trump's call for lower crude prices and higher crude production at the same time, arguing that both goals could be achieved by removing barriers and developing more infrastructure under a strategy of "Build, baby, build". Executives from the US and European majors talked up prospects in the offshore Gulf of Mexico, which is enjoying a resurgence in interest as pioneering technology opens up previously inaccessible resources. But the industry needs to work with the administration to explain the unintended consequences of its tariff policies, pipe manufacturer Tenaris said, as they affect equipment used for deepwater development. In the shale, with most public operators pledging to keep spending down this year and growth to a minimum, few have thus far shown any appetite to open the floodgates. US major Chevron might forecast double-digit output growth from its Permian operations this year, but it is slowing its spending. "Chasing growth for growth's sake has not proven to be particularly successful for our industry," chief executive Mike Wirth said. "And so we're moving towards a plateau that will open up the free cash flow generation and then sustain that for a long period of time." Tech flows Consolidation has helped to improve financial performance and efficiency of the larger operators now dominating the Permian, giving them the ability to drive technology gains and improve recovery rates, according to ExxonMobil's new head of oil and gas production, Dan Ammann. "When you have a position like ours — with continuous acreage — it allows you to do things that others are unable to do, like very long laterals," he told the conference. "Today we are recovering 6-8pc of the total resource, so the ability to unlock increased recovery of that through technology is a great way to grow production." Occidental Petroleum's chief executive, Vicki Hollub , is advocating the use of enhanced oil recovery techniques with CO2 pulled in by direct air capture facilities — which remove CO2 from the atmosphere — like the projects Occidental is developing. Pilot tests in the Midland basin suggest the company could double recovery rates using this technique for shale, Hollub said. And even though growth in shale output looks set to reach a plateau by the end of the decade, industry leaders voiced optimism that its decline will be slow and future drilling breakthroughs, possibly driven by artificial intelligence, could yet prolong its lifespan. "Never bet against this industry in terms of technology," ConocoPhillips' chief executive, Ryan Lance, warned. "It will always figure out a way to get more resource out of the rock." By Stephen Cunningham US tight oil production Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Oil industry embraces Trump trade-offs


17/03/25
News
17/03/25

Oil industry embraces Trump trade-offs

Washington, 17 March (Argus) — President Donald Trump's key energy advisers lavished praise and promises of deregulation on US oil and gas executives attending the CERAWeek by S&P Global conference in Houston last week. But his domestic and international policies, and failure to explain their desired outcomes, have created significant uncertainty for investors in the energy sector and the broader economy. "I'm going to share two words that I don't think you have heard from a federal official in [former president Joe Biden's] administration during the last four years, and those two words are ‘Thank you'," interior secretary Doug Burgum told the conference. Burgum, appointed by Trump as chairman of a newly formed National Energy Dominance Council, projects that cutting oil and gas regulations and streamline permitting could trim $6-8/bl from US oil production costs. Burgum's assessment of the savings that the regulatory overhaul would yield is a way to reconcile Trump's demands on the industry to lower oil prices and at the same time push US crude output beyond what are already record levels. Trump on 12 March celebrated oil prices falling to $65/bl as another major win — even though Nymex sweet crude futures were closer to $70/bl that day — and some members of his economic team are eyeing the $50/bl mark . His energy team says it does not have a specific price target, but "the actions of this administration are to make it easier to produce more oil and natural gas" and encourage producers to invest more, energy secretary Chris Wright told the CERAWeek conference. Oil and gas executives for now appear grateful to be embraced by the White House, and attribute government interventions on trade and other fronts to the initial exuberance of a new administration. Wright's denunciation of what he called Biden's "irrational, quasi-religious climate policies" was well received and set the tone for the conference. Even Adnoc chief executive Sultan al-Jaber , who just two years ago labelled his fellow oil executives' view on climate change as problematic, recast the problem and pronounced it to be solved. "The world is finally waking up to the fact that energy is the solution," al-Jaber said. Permitting pay-offs later... But concerns about new sources of regulatory uncertainty are starting to mount. Approving specific pipeline and other energy projects by executive fiat needs to be backed by legislation that makes permitting reform possible, Chevron chief executive Mike Wirth told the conference. And Trump is making it increasingly difficult to pass off his tariff policies as a mere negotiating tactic. His trade actions are proving to be sticky — even the temporary relief for Canada tariffs has forced market participants to scramble to prove that the energy trade is covered by the US-Canada-Mexico free trade agreement terms and is thus tariff-free, Alberta's minister of energy and minerals, Brian Jean, said. OECD energy watchdog the IEA on 13 March downgraded its global oil demand growth forecast for 2025, noting a deterioration in macroeconomic conditions driven by rising trade tensions. The agency envisages a larger supply surplus as a result — a surplus that could be greater still, depending on Opec+ policy. The Trump administration casts its declaration of an "energy emergency" as the best way to address long-standing complaints across the energy industry about the lengthy permitting process and multiple layers of federal and state-level oversight. "We will identify where the overlap is, we will identify where the overreach is... then we're going to help solve the problem and identify what else we can just get rid of in the federal government," Burgum told the conference. But he and other administration officials have already indicated that they expect the main beneficiaries to be the oil, gas and coal industries, making it easier to expand production, authorise pipelines and approve new coal and gas-fired power plants, and to even force coal-fired plants that have already been mothballed to reopen. The Environmental Protection Agency on 12 March said it will revise more than 30 climate regulations that were issued under Biden, including CO2 limits for power plants and automobiles, national air quality standards and methane limits for the oil and gas sector. Midstream company Williams' chief executive, Alan Armstrong, said that the permitting shortcuts outlined by the Trump administration would more than offset the higher cost of steel used in pipes as a result of new tariffs . Armstrong, who estimates permitting costs to be twice as high as the cost of pipeline materials, said that "we'd be glad to pay the 25pc tariffs as long as we can get the permits done". He also said he is hopeful that durable legislation relaxing infrastructure permitting rules will be passed under the new administration. But industry group American Petroleum Institute president Mike Sommers, while praising Trump's deregulation agenda, offered a more sober outlook on the possibility of a long-discussed overhaul of federal permitting through federal legislation. Congress' failed effort to amend permitting laws last year "should be the basis upon which all other permitting bills are built", Sommers said. But, he cautioned, "we all have to be realistic about the partisan make-up of Congress and the difficulty of getting 60 votes" in the Senate, where the Republican majority is 53-47. The new gas-fired power plants and nuclear power investment that Trump wants might prove insufficient for meeting surging US power demand for artificial intelligence (AI) data centres this decade, US utility NextEra chief executive John Ketchum said, noting his company's continued preference for adding renewable generation. "There's a timing difference… and there's a cost difference" between renewables and other generation sources, Ketchum said, noting that the cost of new gas-fired generation has more than tripled since 2022. ...uncertainty now Oil and gas producers might feel reinvigorated by Trump's promise of deregulation, but energy traders say that his unpredictable actions on tariffs, foreign affairs and the economy are creating volatility in futures markets at a time of increased concern about the stability of investments made in the US. The Chicago Board Options Exchange's VIX volatility index — which uses options trades to track the likelihood of major stock market swings — has nearly doubled since Trump took office and hit a seven-month high last week. The pace and breadth of Trump's agenda are "surprising even his most ardent supporters" and resulting in markets having "mixed feelings" over his policies, Futures Industry Association president Walt Lukken said on 10 March at the International Futures Industry Conference in Boca Raton, Florida. Lukken cited a recent survey of the industry group's members, which identified tariffs as the policy that could most negatively affect markets. Trump's oft-repeated stated desires to annex Greenland and Canada and his willingness to allow Tesla chief executive Elon Musk to exert vast power in his administration without a clear conflict-of-interest policy have helped to further rattle investor confidence, European exchange Euronext's chief executive, Stephane Boujnah, said. US assets could start trading at a discount because of concerns over the rule of law and an "oligarch risk" that more usually exists in emerging markets, he said. "One of the features of the emerging market is that you invest, you own something, until the guy with gold who is close to the ruler wants it too," Boujnah said. By Haik Gugarats, Julian Hast and Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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