Shell is slashing up to $7 billion in spending and doubling down on its liquefied natural gas (LNG) business, as it seeks to position itself as the global leader in the gas sector and boost shareholder returns.
In a report released ahead of an investor meeting in New York, the British energy major unveiled a new strategy that expands its previous cost-cutting target of $2–$3 billion by 2025 to $5–$7 billion by 2028, a move that includes hundreds of job cuts and a review of its chemicals business.
The company’s shares rose 2% in morning trading on the London Stock Exchange following the announcement.
Shell plans to grow its LNG sales by 4–5% annually through 2030, while maintaining its current levels of oil production. The strategy aligns with Shell’s forecast that global LNG demand will soar by up to 60% by 2040, driven largely by Asian economic growth and rising energy demand from heavy industry and transport sectors.
According to Shell, global LNG demand could reach 630–718 million metric tons annually by 2040.
While Shell sharpens its focus on natural gas, rival BP is taking a different route, announcing last month a plan to increase oil and gas investments to $10 billion annually while pulling back from renewable energy initiatives.
Despite the shift in strategy, Shell has left its climate goals unchanged, with Sawan affirming that LNG will be the company’s “largest contribution to the energy transition over the next decade.”
The restructuring comes on the heels of a 17% drop in Shell’s annual net profit for 2024, attributed to weaker oil and gas prices and asset write-downs. The company also signaled possible U.S. partnerships and closures in Europe as part of its new cost-efficiency drive.
