Report: Shell to cut low-carbon jobs and scale back hydrogen business


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Home Hydrogen Report: Shell to cut low-carbon jobs and scale back hydrogen business

October 27, 2023,

Aida Čučuk

According to news agency Reuters, energy major Shell will cut at least 15% of the workforce at its low-carbon solutions division and scale back its hydrogen business as part of CEO Wael Sawan’s drive to boost profits.

Illustration only; Courtesy of Shell/Stuart Conway

The staff cuts and organizational changes come after Sawan, appointed as CEO in January 2023, vowed to revamp Shell’s strategy to focus on higher-margin projects, steady oil output and grow natural gas production, Reuters said.

Shell will cut 200 jobs in 2024 and has placed another 130 positions under review as part of a drive to reduce the headcount in the unit, which numbers around 1,300 employees, the company confirmed in response to a query from Reuters, adding that some of the roles will be integrated into other parts of Shell, which employs more than 90,000 people.

“We are transforming our Low Carbon Solutions (LCS) business to strengthen its delivery on our core low-carbon business areas such as transport and industry,” the company told the agency.

To note, LCS operations include hydrogen and other businesses looking at decarbonizing transport and industry sectors but do not include the renewable power business.

The LCS division also includes Shell’s carbon capture and storage and nature-based solutions businesses, which, according to Reuters’ sources, will not be impacted by the current round of cuts.

Shell plans to sharply scale back its hydrogen light mobility operations, which develop technologies for light passenger vehicles, and will focus on heavy mobility and industry. Additionally, it will merge two of four general manager roles in the hydrogen business, Shell told Reuters.

The energy major also noted that its global hydrogen portfolio remains a key part of the company’s efforts to address the commercial and technical challenges in scaling its LCS business.

“We will be disciplined in only making investments with the highest chance of creating value and lowering emissions,” Shell said.

To remind, in 2022, the company started building a 200-megawatt electrolyzer plant in the Netherlands to produce zero-carbon, or green, hydrogen. It also applied for a grant to develop a low-carbon hydrogen hub in Louisiana, U.S., but the project was not among seven announced earlier this month that will share $7 billion in U.S. federal grants.

In regard to Shell’s LNG endeavours, this October of 2023, the company signed a shareholder agreement with Oman LNG. Shell Gas said it will remain the largest private shareholder in Oman LNG, with a 30% shareholding, and it continues its role as technical adviser.

In addition and based on previously signed term sheets, Shell International Trading Middle East FZE will purchase up to 1.6 million tons per annum (mtpa) of LNG from Oman LNG from 2025 to 2034, making Shell the largest LNG off-taker from Oman LNG.

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