The manager joined Shell in 1983 and became chairman in January 2014.
(Photo: Reuters)
London The British-Dutch energy group Shell will have a new boss at the beginning of next year: 48-year-old Wael Sawan will replace CEO Ben van Beurden. The 64-year-old Dutchman will continue to advise the company for six months after retiring from the top and then leave the group. The stock exchange reacted positively to the change in management with a plus of a good one percent.
The change of baton was expected and Beirut-born Sawan, who holds a Canadian passport, has long been a favorite for the top posts. The Shell veteran previously headed the integrated renewables and gas business, having previously worked in both upstream and downstream areas of the group. In view of climate change, the area of renewable energy is considered to be the strategically most important business area for the group.
“Wael Sawan is an exceptional leader who has all the qualities needed to lead Shell safely and profitably through the next phase of change and growth,” said Chairman Andrew Mackenzie. His trading, operations and restructuring roles reflect his experience and understanding of Shell and the energy sector. The change in leadership is the result of the succession process initiated by the Executive Board. Sawan will “accelerate the execution of our strategy.”
Like the entire energy industry, Shell is going through a dramatic change. After demand collapsed during the corona pandemic and the group had to cancel its dividend for the first time since World War II, Shell and other energy companies recently benefited from the enormous price increases triggered by Russia’s war against Ukraine.
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Shell more than quadrupled its profits to $18 billion in the second quarter of the current fiscal year. The group intends to distribute around six billion dollars of this to shareholders in the third quarter through share buybacks. Shell had previously repurchased $8.5 billion of its own stock.
However, high crisis profits and massive share buybacks have led to calls for a windfall tax in numerous states. The latest example is the EU’s “solidarity levy” for oil, gas and coal producers, which is expected to bring in around 140 billion euros. In the UK, the company already paid an additional tax of 25 percent on its oil and gas profits. At the same time, however, the energy sector is undergoing a dramatic transformation process away from fossil fuels towards renewable energies.
After Shell initially resisted calls for firm targets for reducing greenhouse gases and received massive criticism from environmentalists, especially in its former “home” the Netherlands, the company has gradually set more ambitious targets to combat climate change since 2017. Shell is now aiming to reduce its emissions to (net) zero by 2050. “We will be disciplined and values-based,” Sawan said.
Shell is undergoing a dramatic change
Sawan must continue the work of his predecessor and accelerate the shift in the energy mix. During van Beurden’s nine-year tenure at the top of the group, the British Gas (BG) Group was also taken over, which in 2016 not only made Shell the largest gas producer in Great Britain, but also one of the world’s leading traders in liquid gas.
The deal, which cost around 53 billion dollars, was controversial at the time because analysts suspected that Shell could overtake itself financially. In retrospect, the sharp increase in gas prices seems to prove the strategist van Beurden right. At the same time, the company parted with numerous business areas worth around 30 billion dollars in the past decade.
The last major change under van Beurden was the “relocation” of the company headquarters from the Netherlands to London, which also lost the suffix “Royal Dutch”. The reason for the change of location was, among other things, the massive pressure from investors, courts and environmental activists in the Netherlands on the group to say goodbye to fossil fuels. Sawan, who previously worked in The Hague, must now also move.
More: The EU wants to skim off the profits of oil and gas companies
