Shell has announced that it will slash its ties with Russia and instead inject up to £25billion into the UK's energy system - in a huge boost for Britain.
The announcement came as a response to Chancellor Rishi Sunak’s Spring Statement yesterday, where he took time to address measures to ease the UK's energy crisis. Bills have been soaring for millions of Britons, with the energy price cap (maximum tariff) rising to £2,000 in April in a 50 percent increase. But the Chancellor also called for a “culture of enterprise” and greater capital investment to ramp up growth and productivity in Britain.
Shell has spotted an opportunity here to kill two birds with one stone.
In response to Mr Sunak's announcement, Shell UK country chair David Bunch said: “I can announce that Shell UK is planning to invest between £20 and £25 billion into the UK energy system over the next decade.”
And the energy giant has pledged that more than 75 percent of this investment will be geared towards low and zero-carbon products and services.
This includes technologies such as offshore wind and renewable hydrogen.
Mr Bunch added: “These investments, subject to board approval, aim to propel the UK closer to net zero and help to ensure the security of supply whilst stimulating economic growth and jobs."
But he stressed that the Government still has a big role to play too.
He said: “However, Shell cannot act alone. Investing this money requires urgency of action across government to deliver the enabling policy and business case frameworks. These must address both the supply and demand side of the energy transition (in areas such as hydrogen and carbon capture storage (CCS), for example).
“We look forward to working together to help the UK secure its future energy supply and move towards its 2050 net-zero target.”
This also comes after Shell and other energy giants attended a meeting with Prime Minister Boris at Downing Street last week to discuss how the UK can boost its own energy supplies and scupper ties with Russia amid the Ukraine crisis.
Mr Johnson is now set to announce this in a new energy strategy in the coming weeks.
Russia still supplies Britain with around five percent of its gas, and 24 percent of oil imports in the UK last year were also of Russian origin.
But now, Britain has pledged to phase out Russian oil by the end of the year, and is eyeing up sanctions on gas too.
Shell is now looking to help ramp up Britain's energy security and play a role in Mr Johnson's new energy strategy.
The company is also cutting its own ties with Russia.
It pulled out of the £8billion Nord Stream 2 project, a planned 750-mile-long pipeline that would have sent gas from Russia to Germany, bypassing Poland and Ukraine.
While Shell did not disclose how much it spent on Nord Stream 2, some estimates suspect it contributed as much as £750million for the pipeline’s construction, being one of five Western companies which bankrolled 10 percent of the construction cost for the £8billion pipeline.
Shell is also pulling out of a joint venture at a major liquefied natural (LNG) gas plant Sakhalin-II, which it had a 27.5 percent stake in
It is also set to ditch its 50 percent stake in the Salym Petroleum Development and the Gydan energy venture.
Shell’s chief executive officer, Ben van Beurden, said in a statement: “We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security.
“Our decision to exit is one we take with conviction. We cannot — and we will not — stand by. Our immediate focus is the safety of our people in Ukraine and supporting our people in Russia.
“In discussion with governments around the world, we will also work through the detailed business implications, including the importance of secure energy supplies to Europe and other markets, in compliance with relevant sanctions.”
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