Royal Dutch Shell

Shell PLC (FTSE 100 – SHEL) formally known as Royal Dutch Shell is a well known energy business and has been operating for over 185 years.

Evolving from its humble beginnings back in 1833 in an antiques shop based in London, Shell is one of the largest global energy companies today, Shell is both innovative and successful.

There is a saying in the investment world: “Never sell Shell” as it is renowned for its quality business and historical dividends as well as being one of the largest FTSE 100 paying companies.

Its business is caught in the modern times and is at the start of a new cycle in its history of transitioning from an old oil company to a new energy business. The group has been seeking new investments in low carbon energy production which include liquified gas or natural gas, that has a lower carbon output than traditional coal when generating electricity. This integrated gas business Shell operates is one of the largest in the world. Shell is helping us all as we transition from dirty goal by using LNG as a transitioning fuel, helping generate cleaner electricity and lowering carbon emissions. There is a low carbon commitment and focus on renewables like wind, solar, hydrogen and Carbon Capture projects through the new Shell Energy business set up in 2016.

As we watch the news and read about the climate emergency there is still a need for fuel for our transport, like cars, public transport or the lorries to distribute all of the goods we consume everyday.

Our world still requires energy and all us consumers use it, whether we admit it or not. Therefore I see a continued case for Shell remaining within the portfolio as it pays a dividend and is making the right transitional steps to a greener future.

Part of my investment thesis is to ensure part of my portfolio is sustainable and Shell can be part of that as mentioned in the reasons above. A vast amount of money generated from traditional fuels is already being diverted to new green investments and technologies. All oil majors will only increase this type of spend over time, leaving companies like Shell with a portfolio of green investments and greener power generation. The same is already happening with other oil majors as they are all are seeking ways to transform their businesses to a new low carbon future. Due to the sheer amount of funds available, how we will view these businesses in 80 years from now should be vastly different from today. They are predicting 80% of their energy from will be from renewables and just 20% (if that) from old oil investments. (Click her for Shells wind projects).

Hydrogen another fuel type that is going to be a fuel of the future and Shell has already over 50 stations around the world delivering Hydrogen from the: UK, Netherlands, Canada & China. From the production to distribution Shell is making investments in hydrogen and if you are interested further in their projects click here.

As revenues are created in over 80 different countries I would class Shell as a diversified stock. There has been a recent focus on supplying retail customers through its forecourts.

Here are some of the reason why I invest in Shell:

1, Investments into wind started over 20 years ago off shore in UK waters and in the USA on land totalling 6 Giggawatts (GW)

2, There are three major carbon capture projects in Canada, Australia & Norway

3, Hydrogen production has started and is distributed in countries like: Germany, Netherlands & US Markets

4, Established oil and gas revenues will only help drive the business green energy transition

5, Shell is well known for its quarterly dividend income with institutional investors

6, Operationally the entire sector has been come more cash disciplined of late, there been an emphasis of increasing dividends and share buy backs among all the major players.

The divestiture of the utilities business to Octopus Energy in 2023 completed in the final quarter as this segment was not deemed to be very profitable due to the government regulations and the complexities surrounding price caps.