Shell fights on profitably for fossil fuel extraction
Plans to harvest gas and oil off pristine Wild Coast could meet stiff opposition
While Shell is sailing into an environmental storm over its plans to harvest gas and oil off the pristine Wild Coast, its profits are on a smooth upward curve.
It has recovered from a disastrous pandemic-affected 2020. In the quarter ending September it posted adjusted earnings of R615bn, up 25% up from the same period in 2020.
According to Refinitiv, one of the world’s largest providers of financial markets data, while the earnings were more than healthy, expectations were that Shell could have earned 20% more.
Shell is the largest company outside China and the US.
In 2020, Forbes Global 2000 ranked it the second-largest public company in the world.
Shell has operations in more than 70 countries and produces about 3.7-million barrels of oil a day.
Shell is no stranger to being accused of pollution. It was recently under pressure from Amnesty International, and Friends of the Earth in the Netherlands, due to severe problems in the Niger Delta, where its aged and corroded pipelines were leaking, destroying farmlands and polluting water.
In May, Shell was compelled by a Dutch court to target 2050 to become a net-zero carbon emissions company and reduce its current emissions by 45% by 2030. The company appealed.
Billionaire activist investor Dan Loeb, whose group has a substantial chunk of Shell stock, added further pressure by calling for the company to split into smaller, more measurable and accountable companies.
Investors are gradually responding to scientists’ repeated warnings that burning fossil fuels such as coal, oil and gas are the main climate change culprits.
Analysts have predicted that shareholders are reaching an investment tipping point over scepticism that the fuel giants have not put their backs into striving for energy alternatives.
Though fuel companies court pollution controversy and Shell is no exception, the people of the Transkei are experienced in taking on giants.
Xolobeni villages have, since 2002 when rare minerals were discovered, opposed any mining.
Villager protest and court action led to a department of minerals and energy decision to suspend its decision to grant mining permits to Australian Mineral Sand Resources.
If shell finds gas or oil off the coast, it will have to get it to a production point on land.
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