LONDON (Reuters: Shell has turned to the head of its gas and renewables business to drive its transition to a lower-carbon future, picking Wael Sawan to replace Ben van Beurden as chief executive.
Sawan’s appointment comes at a pivotal time for the oil giant, which is aiming to reduce emissions to net zero by 2050 and moving away from fossil fuels even as Europe looks to fossil fuels to survive a growing energy crisis.
Lebanese-Canadian Sawan, 48, was seen as the front-runner to replace van Beurden, who is stepping down at the end of the year after nearly a decade at the helm and 40 years at the Shell, the world’s largest fuel retailer and liquefied natural gas (LNG) trader.
During his tenure, van Beurden oversaw Shell’s biggest acquisition in decades and steered the company through two major downturns and a crucial move to cut greenhouse emissions – a task that will only grow in importance for his successor.
Shell lost a landmark case launched by climate activists last year when a Dutch court ordered it to cut emissions faster — a ruling the company has appealed.
While Shell’s strategy through the energy transition is focused on providing low-carbon fuel and power to customers, its current spending is still heavily weighted toward oil and gas.
“He must state that Shell will massively shift capital expenditure to renewable energy in the short term,” Greenpeace said.
Sawan previously headed Shell’s oil and gas production business and now oversees its low carbon energies and giant gas business.
Credit Suisse analysts said he was well known to investors and expected his appointment to have limited impact on Shell’s strategy. Credit Suisse Asset Management is a top five shareholder in Shell.
“The shift is likely to be more of a continuation than revolution of the strategy put in place by van Beurden,” RBC Capital analysts said.
Dutchman van Beurden, who joined Shell in 1983 and became CEO in January 2014, will stay on as adviser to the board and leave the company at the end of June next year.
The 64-year-old has been focused recently on the relocation of Shell’s headquarters from The Hague to London as well as the energy crisis that has gripped the world in the wake of Russia’s invasion of Ukraine in February.
After the coronavirus pandemic and the collapse in energy demand in early 2020, Shell cut its dividend, the world’s largest at the time at around $15 billion, for the first time since World War Two.
But in July, the company posted record results, with a $11.5 billion second-quarter profit smashing the mark it set only three months before.
“Investors will be looking to assurances on dividend security and renewable strategy,” said Hargreaves Lansdown analyst Sophie Lund-Yates.
Shell’s London-listed shares, which have gained more than 44 percent in value so far this year, were up slightly in early trade.
Sawan’s appointment is effective Jan. 1.