Shell cutting oil and gas production costs to fund transition into power markets and renewables
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Combustion Industry News Editor
Shell is attempting to reduce its spending on oil and gas production by 40% in an effort to free up money to allocate to renewable energies and power markets, Reuters has reported. The cost-cutting Project Reshape is expected to be completed by the end of this year, with the 40% being on top of the US$4 billion (€3.43 billion) in cost reductions the company is trying to achieve in response to the COVID-19 crisis. It is believed that Shell will narrow the focus of its oil and gas production in order to help reduce costs, with the North Sea, the Gulf of Mexico, and Nigeria being three of the areas to be kept. Part of the motivation for freeing up costs is a race to obtain market share in power markets, with BP and Eni also pursuing a similar strategy to Shell in reshaping themselves to adapt to a low-carbon future. A major restructuring is to be announced at the end of the current review process, with an investor day to be held in February 2021. Thousands of jobs are expected to be lost, although other savings are expected to come through further digitization and machine learning processes to help reduce outages.