Shell starts the transition with the resignation of the CEO - VybezTV
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Shell starts the transition with the resignation of the CEO

Shell announced the resignation of chief executive Ben van Beurden on Thursday. The British oil and gas giant is looking to reinvent itself under renewable energy group chief Wael Sawan.

Van Beurden, a 64-year-old Dutchman, will step down at the end of 2022 after nine years at the helm of the energy group and nearly four decades as a Shell employee.

Van Beurden presided over the rollercoaster ride of oil prices fuelled by the Covid pandemic and the Russian invasion of Ukraine, and oversaw a major corporate restructuring that dropped the “Royal Dutch” name.

The outgoing CEO “can look back with great pride on an exceptional 39-year Shell career”, chief executive Andrew Mackenzie said in a statement.

He said van Beurden had been “at the forefront of Shell’s transition to a zero-emissions energy business by 2050”, adding that he “leaves behind a financially strong and profitable company”.

Oil and gas prices have soared this year, leaving Shell with “a robust balance sheet, very strong cash generation and a number of compelling growth options”, Mackenzie added.

Shell has been heavily criticised for its net-zero plans by the environmental lobby, which accuses the company of “greenwashing” – marketing a company as overly climate-friendly.

Energy companies, and businesses in general, seek to reduce carbon emissions in line with government targets to tackle climate change.

– Strategy ‘tweaks’ -.

Shell hopes Beirut-born Sawan, 48, will drive the conversion plans.

“For a group whose renewable energy strategy was somewhat vague, although it sounded grand, this is a clear sign that Shell intends to change that,” said Hargreaves Lansdown analyst Sophie Lund-Yates.

“The change won’t happen overnight, but it’s reasonable to assume that at the very least adjustments to the existing renewable energy strategy may be forthcoming.

Mackenzie described Sawan as “an exceptional leader who has all the qualities required to lead Shell safely and profitably through the next phase of change and growth”.

The new chief executive has a “track record in trading, operations and restructuring” as well as a deep understanding of Shell and the energy sector in general, the chairman added.

Sawan, who holds Lebanese-Canadian citizenship, has been with Shell for 25 years in various roles in Europe, Africa, Asia and the Americas.

He is currently director of integrated gas, renewables and energy solutions.

“I look forward to … capitalising on the opportunities presented by the energy transition,” Sawan said in a statement.

– Oil price boom –

In Van Beurden’s tenure, the oil price collapsed into negative territory in 2020 as the Covid shutdowns hurt demand.

Shell suffered a net loss of $21.7 billion in 2020 as factories were closed and planes grounded.

This resulted in the group cutting thousands of jobs, similar to its British rival BP.

Since then, oil prices have rebounded strongly as economies reopened following a pandemic and major oil producer Russia’s attack on Ukraine.

Gas prices have also soared due to the conflict, leading to Shell’s net profit soaring more than fivefold to $18 billion in the second quarter of this year.

This was despite van Beurden’s costly withdrawal of Shell from the Russian gas and oil business.

Shell and BP’s soaring profits come at a time when Britain is facing a cost-of-living crisis that has prompted calls for a far higher tax on profits for the two companies than was unveiled earlier this year by former finance minister Rishi Sunak.

Last year, Van Beurden initiated a simplification of Shell’s complex structure by moving its headquarters from the Netherlands to the UK and dropping the Royal Dutch name.

Van Beurden, who was appointed CEO in January 2014, will continue as an adviser to the board until mid-2023.

Shell’s share price was largely unchanged in morning trading on the rising London Stock Exchange.

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