Fortune magazine has carried a long but interesting article into the strategy behind Shell’s decision to sell much of its Canadian oil sands leases to Canadian Natural, for a net price of US$7.25 billion (€5.83 billion). While it does not mean Shell is pulling completely out of oil sands in Canada, according to Fortune, it does reflect new strategic beliefs at Shell headquarters. After much consideration, the company’s leadership is now convinced that the energy sector is changing fundamentally, and that global demand for oil will peak sometime between the late 2020s and late 2040s due to competition from other sources of power, chiefly renewable energies (and, presumably, the spread of electric or hydrogen-powered cars), and more stringent regulations and policies around greenhouse gas emissions. What would follow would be a long decline, with those companies left holding oil assets being the losers (the head of Shell’s future ‘scenarios’ team puts it more bluntly). Shell CEO Ben van Beurden put it succinctly: “We won’t be sitting ducks. We’re going to adapt.” Continuing, however, he pointed out the crux of the problem for a traditional oil and gas company: “What is a challenge at the moment is that we don’t know anymore where the future will go.” Shell has divided future scenarios into four, made by the intersection of two axes, one being low or high total energy demand and the other the technologies used to produce it (low technology to high technology). A high demand, low technology scenario would mean more demand for fossil fuels, while at the opposite end of the two axes would be a highly energy efficient world reliant mostly on renewable energies and storage technologies. Prongs of the new strategy that Shell is taking are: reducing production costs in the present oil business so that profit can be made even at US$40/barrel; deepening investment in renewable energies to US$1-2 billion by 2020; becoming more of a mover of renewable energy across the global network; reducing the carbon intensity of its operations; and electrifying the business. At the very least, the company’s keen eye on the future should give it flexibility and speed in adapting to events.