Shell PLC 🐚 🏗 - SHEL

BP also bought Lightsource - europe’s largest solar developer - a while ago.

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No chance that they will move away from oil completely. They would be mad to do so as oil is too valuable as the basis for other materials ie plastics and thousands of other petro-chemicals.

We might have moved away from burning it as a fuel within 10 years but even that is unlikely when you think of things like ships and planes (both could in theory be powered by non-oil based sources but it is more difficult and costly to do in a short period).

If you look at the trends each energy transition is happening faster and faster so it is entirely possible oil could be done in 10 years.

But as I said it isn’t just an energy transition. Oil is far more useful for chemicals.

So while the fuels/energy side will move I don’t see the industrial scale changes on the petro-chem side.
Even transport to make a change in 10 years is challenging - the average car age in the uk is 8 years and that transport sector is already changing. Shipping and aviation are not really changing except for a relatively tiny amount of R&D.

Oil consumption is still going up, not down. I think we are way more than 10 years off calling it done.

At the moment renewables is a miniscule part of the total energy consumption in the world. And by miniscule I mean it is hard to see it on a chart.

I am all for a change to renewables, but we are very very far away from that. And by that I mean probably not in our timelines. Demand for oil has been rising steadily and will continue to do so.

Here is some data if you want to see Energy - Our World in Data


That can change relatively fast as governments face up to the challenge of climate change and may have to make some tough calls within literally a few years.

That said, I’m a Shell investor for the dividends as well as their ability to pivot into renewables.

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Wasn’t so long ago that electric cars were a miniscule part of the total car market in the world.

Now look at them.

Climate change and pollution is a big deal. The younger generation (Millennials and Zoomers) are increasingly concerned about the issue. I think we’re on a tipping point at the moment where renewables could go from ‘miniscule’ to ‘major’ in a very short period of time.


Sure but it’s all about the per unit cost of production. Now that renewables are cheaper against almost any source the economics will become hard to argue with. The move to oil was, in part, driven by the massively reduced cost per unit of output.

Cars are only a part of the use of oil. For the UK roughly 50-60% of oil products go on road transport of which cars are around 30-35% ie 15-21% of total oil use. In 2018 2.5% of new car sales were electric (and the Govt has just reduced the grants available for purchase) so there is a very long way to go to replace even car stock (let alone the rest of the transport sector which accounts for much more oil use!). If you want more detail on energy use in the UK have a look at DUKES which is a good summary of UK energy stats from DECC.

None of the above is to suggest that oil usage will be the same (oil companies know that as well and the better ones are already shifting what they do).

If you look at global use of oil the amount hasn’t changed much over the last 40 years - individual countries have seen changes in fuel sources but globally the amount has been fairly consistent (as developed countries reduce oil use, developing countries increase oil use (and that is factored into Kyoto/UNFCCC)).

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I have a question I’m hoping someone can help me with. When a company pays dividend in scrip, where do the shares paid by the company come from, are they newly created or are they previously held by the company after share buybacks? I note Shell offered to pay scrip to conserve cash a couple of years back.

Company’s generally hold vast amounts of their own shares. Buyback is one way of previously acquiring.


Typically newly issued shares.

Barclays seems to agree:

The SCRIP dividends usually relate to newly created shares rather than pre-existing ones. They are taxed in the same way as cash dividends and should be stated when completing your Self Assessment tax return.

Source: What is a SCRIP dividend? | Barclays

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And… the dividend is cut.

The Anglo-Dutch company, which is the first oil ‘supermajor’ to cut its dividend, said it will reduce its quarterly payout by two-thirds to 16 cents per share, from 47 cents per share. The company was the biggest dividend payer on the FTSE 100 in 2019.

Share price is 6% down this morning.

This is a great relief for me. I don’t see how Shell could have not cut its dividend. Getting out ahead of cash flow issues is always better. The cut, combined with the share buyback programme being suspended and the credit line, should ensure Shell makes it through this.


“There will be changes, and therefore we have to be ready for that,” Royal Dutch Shell Plc Chief Executive Officer Ben van Beurden said in a Bloomberg Television interview. “That means that we probably have to re-establish what is going to be our strategy.”

Just bought my first shares at £12.57, I’ll keep topping up on the dips over the next month or so.


Dividend just announced
Ex Div date 13th Aug
Payment Date 21st Sept
$0.16 per share (£ sterling announcement date 8th Sept)

Now trading at lowest levels since 1994 :scream:. It might not happen overnight but I suspect buying a basket of the 6 oil super majors like RDS-B will do very well over next decade and looking back it will be viewed as a no brainer :brain:. It might not happen for 18month or longer so it might require patience and some contrarian will power :muscle:t2:

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They’re certainly not going anywhere. I’ve not kept up on them so don’t know why the price continues to fall (though this seems a common theme among older European/British companies)

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