STORY OF THE MONTH
Shell accelerates transition
to clean energy
Shell Plc wants 20 percent of income from its
retail forecourts to come from vehicles that
don’t burn diesel or gasoline, as the company
anticipates an accelerating transition to
clean energy over the coming decade.
Shell set up its first hydrogen refueling
station in the U.K. earlier this year and will
install its first electric car charging point later
this month, said John Abbott, the top executive
of its downstream business, which
includes refining, marketing, retail, trading
By 2025, he expects these new operations
supplying cleaner fuels, including natural
gas, to make up a fifth of retail earnings.
As major markets including France, the U.K.
and China talk about phasing out the sale of
fossil-fuel-powered cars in the coming decades,
major energy companies are taking
steps to prepare and adapt.
The downstream businesses of Shell and
its peers have been an important source
of profit during the oil market’s three-year
downturn, but there are growing signs that
demand for gas and diesel will start to wane
as people switch to new forms of transport.
“We are talking to a lot of companies at
the moment with a view to significantly extending
the number of countries” where
Shell has electric charging stations, Abbott
said in an interview in London this month.
Shell and rivals have said that demand for
oil could stop growing as early as the 2030s
as the use of EVs expands and more renewable
ARTICLE BY BLOOMBERG, SHELL & ERPECNEWS
sources of energy are used.
As battery prices drop, the proportion of fully
electric cars sold in the U.K. will rise to
one in 12 by 2030, from one in 200 today,
according Bloomberg New Energy Finance.
Shell plans to have 10 charging points
in the U.K. by the end of the year, Abbott
said. It also wants to expand non-fuel sales
of items such as sandwiches and coffee to
all of the 80 countries in which it operates,
from about six in 2013, he said. It aims for
20 percent of retail earnings to come from
products like these by 2025
The company, which has more stores than
Starbucks Corp. and McDonald’s Corp.,
earned $1.1 billion from its marketing operations
in the second quarter ended June 30.
The downstream business as a whole,
which includes refining and chemicals, reported
adjusted net income of $2.5 billion in
the quarter, 63 percent of the group’s total.
Before crude prices slumped in 2014, the
sale of crude oil and natural gas brought in
the majority of earnings.
Shell started its first fuel station in Mexico
last week and plans to open one or two
outlets in the country each week for the rest
of this year, according to country president
Alberto De la Fuente. It plans to expand in
China, India and Indonesia, Abbott said.
“A very exciting area of growth for me is
the marketing business,” Abbott said. “The
demand for energy will increase dramatically.
It’s our job to meet that demand, and it
also has to be cleaner.”
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John Abbott was appointed Downstream Director
on October 1, 2013. He joined Shell
in 1981 after graduating from Birmingham
University, with a first-class honours degree
in Chemical Engineering.
John has since worked in the UK, Singapore,
Thailand, the Netherlands, Canada,
and the USA, predominantly in the areas of
Global Manufacturing and Supply, Trading
In 2006, John became VP Manufacturing
Excellence and Support, based in Houston,
USA. Two years later, he became Executive
VP of Shell’s Upstream Americas Heavy Oil
business, based in Calgary, Canada.
In 2012, John was appointed Executive
Vice President of Global Manufacturing and
led a team of 30,000 employees and contractors
based at around 30 refineries and
chemical sites worldwide.
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