麻豆传媒

I want to reflect on changing times and how they shape Shell's beliefs about the way the world will achieve a balanced energy transition.

Imagine we were to wind the clock forward 25 years from today, to the eve of 2050. We'd hope to find a world that's moved to a low-carbon energy system. And Shell's transformation into a net-zero emissions energy business should be complete, through a mix of low-carbon solutions and emissions from our remaining oil and gas production balanced out through a range of innovations in both abatement and permanent carbon removal.

Achieving this transformation in just a quarter of a century is challenging. But with a collective effort from government, industry and customers I believe it can be done.

Now imagine if we were to wind the clock back 25 years from today. We'd leave this age of artificial intelligence and smartphones and return to a time of fax machines, floppy disks and payphones.

I tell you that as a reminder of the speed and shape of change. People often overestimate what can change in the short term but underestimate what can change in the long term. And today's challenges are far too complex to risk falling into that trap.

The greatest of these challenges is tackling climate change and doing so at the same time as making sure that the world has a secure supply of affordable energy.

And while it might be tempting to try to stop using oil and gas before the world is ready we must not do so at the expense of the energy needs and aspirations of a growing global population. And we must remember that today over 700 million people still have no access to electricity.

More than l in 4 children born in the world today are in Africa. Almost 2 in 4 are in Asia. The world of 2050 will probably have nearly 10 billion people in it and all of them will need reliable access to energy to meet both basic demands and bold ambitions.

So, even as governments, industry and customers act to lower emissions over the next 25 years energy demand will inevitably have to grow to keep up with rising populations and rising ambitions.

So, in that context Shell must put forward plans that are attainable as well as ambitious. And you can see this in what we set out at our Capital Markets Day last year as well as in Shell's updated Energy Transition Strategy, which we published in March.

And these two standout moments were expressions of Shell's firmly held beliefs of how we feel the world's transition to net-zero can be achieved. Let me highlight just a few:

First Shell believes the world needs more liquefied natural gas, or LNG which will be a critical fuel throughout the energy transition. Natural gas - often as LNG - is an effective replacement for coal in power generation - especially in Asia.

Natural gas has around half the greenhouse gas emissions of coal when used to generate electricity and it gives the power system the flexibility it needs at a time when renewable generation is growing rapidly. LNG can also boost energy security because it can be easily shipped to where it's needed most. What's more, embracing LNG readies us for a time when we can decarbonise still further by blending it with things like biogas and hydrogen.

That said, oil will play a vital role for a long time to come because there's still a way to go before alternatives in aviation, shipping and road freight become viable. So Shell believes continued investment in both oil and gas will be needed.

At the same time, we also believe the world needs more solutions to reduce emissions from those slower-to-decarbonise sectors like transport but also, in industry. And Shell has shown how to capture and store carbon effectively as well as ways to turn it into something more useful like blue hydrogen. These are the kinds of solutions that will be vital for a successful energy transition.

Last month I visited Brazil, a place where you can see the energy transition in action. Its great Deep Water assets make it a global player in oil and gas and in turn, Shell is one of the largest players in Brazil. At the same time, Brazil is also a leader in developing low carbon energy sources that we need for the energy transition such as biofuels. And Shell is at the forefront there too.

In Brazil, I visited our joint venture - Raizen whose rapid advances in biofuels show their potential as a practical alternative to fossil fuels.Today, through Raizen, we are the largest producer of second-generation ethanol and the leading sugar-cane ethanol producer globally.

Such progress in low carbon energy sources underscores Shell's next belief: that by 2050, low颅 carbon energy will represent a large share of the world's energy. And this is something Shell has believed for a long time.

Taken together, those beliefs are shaping Shell's direction. I want to congratulate Wael and his executive team for their leadership and strong shareholder returns.

I believe Shell's leaders neither overestimate what can change in the short term nor underestimate what can change in the long term. And they're setting up Shell for success through the energy transition.

Thank you.

Wael Sawan, Chief Executive Officer, Shell plc

Thank you, Andrew.

Before I talk about Shell's strategy in the context of our beliefs about the energy system... I would like to reflect on some of the positive momentum we are seeing in the energy transition.

I saw this momentum at COP28 in Dubai last year... where the vast majority of countries decided to triple the deployment of renewables... double energy efficiency... and drive towards near-zero methane emissions by 2030.

Reducing methane emissions from the production of oil and gas continues to be one of Shell's top priorities.

We're proud to have signed up to the Oil and Gas Decarbonisation Charter and to be contributing to the Global Flaring and Methane Fund... both announced in Dubai.

I also recently travelled to China... where electric car sales are growing so fast that around l in 3 cars on the roads is expected to be electric by 2030.

Meanwhile, here in the 麻豆传媒, there has been a successful reduction in coal consumption from 60 million tonnes a year in 2000 to 6 million in 2022... and there's a plan to cut coal from electric power generation completely this year.

However, despite this progress, more action is urgently needed to address climate change.

This reminds me of what the author Amin Maalouf once wrote, and I quote: "Progress is made in tiny surges, in successive laps, like an endless relay race... and there are links without which nothing would be passed on." End quote.

For me, those links are the people who make progress possible...

... colleagues, customers and shareholders...

... who are taking the energy transition forward, step by step...

... just like a relay race.

As Andrew just mentioned... the world needs a balanced energy transition... one that maintains secure and affordable energy supplies as the world moves to net zero.

This is why... mindful of our core beliefs around future energy demand... Shell is responsibly delivering the oil and gas people need today... while helping to build the clean energy system of the future as we transform our business in the coming decades... step by step... focusing on where our strengths lie.

This means we're keeping our oil production stable to 2030... and we're growing our LNG business further... so that we can continue to provide a critical fuel in the energy transition.

We're also investing $10 to $15 billion between 2023 and the end of 2025 in low-carbon energy solutions such as electric vehicle charging, renewable power, biofuels, hydrogen and ways to capture and store carbon.

For all our investments... in oil and gas and in low carbon energy solutions... we're making clear choices about where we can create the most value.

And since our ability to raise and invest capital depends on delivering strong returns to shareholders... which shapes the role Shell can play in the energy transition... we believe this focus on value makes it more likely that we will achieve our climate targets and ambitions.

In short, we believe we have the right strategy to create more value with less emissions... and be the investment case through the energy transition.

And at the heart of this strategy... you'll find people. Let me firstly start with our staff at Shell.

My colleagues are delivering our strategy... by enhancing performance, embedding discipline, and enabling simplification in our businesses.

I'll give you some examples of their actions.

Our focus on performance can be seen at our new oil and gas platforms such as Timi in Malaysia that is 60% lighter than conventional platforms... making it more cost efficient.

Since Timi is also powered by wind and solar... it's a great example of how we are creating more value with less emissions.

Beyond new projects... we're also improving the performance of existing assets like our Nelson oil and gas platform off the coast of Scotland.

By going from two gas-powered generators to one... Nelson's carbon emissions went down... and its gas sales went up.

As part of our disciplined approach our capital spend was within our $22 to 25 billion a year range last year.

And we've stopped selling power to households in the 麻豆传媒, Germany and the Netherlands.

We felt that our time, efforts and capabilities can better be used in helping our customers in transport and industry.

And when it comes to simplification, we are rallying behind a few specific targets.

A year ago, we had more than 50 financial and business-level commitments... which risked us running in too many directions.

I believe the best version of Shell is the focused version of Shell.

To deliver that focus... we now have only 4 financial targets, 4 climate targets and a climate ambition... that we have announced in pursuit of delivering more value and less emissions to achieve net zero by 2050.

Now I want to turn to the second group of people... you, our shareholders... and talk about how we have delivered against these targets.

I've already outlined how we have been disciplined about our capital spend.

In addition, we have reduced structural costs... delivered solid shareholder distributions... and increased growth in our free cash flow per share.

We're also making good progress towards our climate targets. Driving down absolute emissions from our own operations... significantly reducing methane emissions and routine flaring...and reducing the net carbon intensity of the energy products that we sell.

This last metric... our net carbon intensity... shows our progress in changing the mix of the energy products as we grow sales of low-carbon energy solutions.

This brings me to the third group of people... our customers.

We're focusing on sectors where we have competitive strengths... see strong customer demand... and identify clear regulatory support from governments.

In the transport sector, for example, we are building on our customer relationships and expertise to help drive the decarbonisation of passenger cars, heavy-duty trucks, planes and ships.

We aim to grow our public charging network for electric vehicles, and stay a leader in biofuels including sustainable aviation fuels or renewable diesel made from waste.

Don't take my word for it... let's hear what our customers say.

I am proud of the relationships Shell has built with our customers and hugely appreciative of the trust that they have put in us.

As we grow sales of low-carbon energy solutions to our customers... we expect to gradually reduce sales of oil products such as petrol and diesel.

And we've set a new ambition to reduce customer emissions from the use of our oil products by 15-20% by 2030 compared with 2021.

These emissions were 569 million tonnes of CO2 equivalent in 2021... and had reduced to 517 million tonnes in 2023...

So we're making progress.

We're also developing solutions to help these sectors in the long term... for example hydrogen and ways to capture and store carbon.

How these long-term solutions will play out is uncertain... so we'll move step by step... proving these businesses are viable before we can grow them further.

Acknowledging this uncertainty around the pace of change in the transition is why we've retired our net carbon intensity target for 2035... and are now focused on achieving our updated target with a newly introduced range of a 15 to 20% reduction by 2030, when compared with 2016.

And we will continue to be transparent about how we're delivering on our targets and ambition in our 麻豆传媒 Report.

In conclusion...by providing the different kinds of energy the world needs... and with our focus on performance, discipline and simplification...

We believe we are the investment case and the partner of choice through the energy transition. There is much more to do.

As Malouf reminds us, progress is not made at once... but step by step.

We are committed to play our part...helping to deliver the secure supply of energy that benefits people all over the world today...

and to deliver more and cleaner energy solutions so they can continue to benefit now and well in the future.

Thank you.

Closing statement

Sir Andrew Mackenzie, Chair of the Board of Directors, Shell plc

Before we close today, I'd like to say a few final words.

To those who've waited patiently through today's disruption: I'm grateful for your patience and understanding.

And to those protestors remaining: I believe it's right that we should hear your views today.

After all, an AGM must be a two-way forum... where Shell's shareholders are heard.

Indeed, we presented the Energy Transition Strategy 2024 resolution in that spirit... as an advisory vote and a chance for shareholders to challenge and give criticism where they feel it's justified.

At the same time, people's safety must come first... so, it's a matter of regret that some of those who disrupted today's meeting had to be removed.

Climate change is an emotive issue. And rightly so.

Tackling it will require real changes... from government industry, customers and companies, including Shell.

Our Energy Transition Strategy 2024 not only sets out the scope and shape of how shell is changing鈥ut Shell's intention to be part of the solution to climate change.

I believe the results of today's votes show we're on the right track.

But we know there's much more to do鈥nd we'll continue to update you on our progress.

So, on behalf of the board, I want to thank you for your support鈥�

鈥nd thank everyone for coming.

I formally declare 2024 麻豆传媒 General Meeting closed.

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