Shell CEO sees no val­u­a­tion hit from cli­mate ac­cord

Kuwait Times - - BUSINESS -

Royal Dutch Shell ex­pects to pump out all the fos­sil fuel re­serves listed on its bal­ance sheet, its chief ex­ec­u­tive said, dis­miss­ing con­cerns that pro­duc­tion lim­its in the wake of the Paris cli­mate ac­cord could hit the en­ergy gi­ant's val­u­a­tion. In an in­ter­view with Dutch news­pa­per Het Fi­nan­cieele Dag­blad, Ben van Beur­den said the is­sue of "stranded" re­serves - de­posits in the ground that can­not be used be­cause of car­bon emis­sions lim­i­ta­tions - would have no im­pact on bal­ance sheets.

"The com­pany is val­ued on pro­d­u­ca­ble re­serves that we can pro­duce in the next 12 or 13 years," he said. "We should cer­tainly be able to pro­duce those un­der any cli­mate out­come. Even if global tem­per­a­tures can only rise by 2 de­grees." The Paris Cli­mate Agree­ment, which came into force this month, com­mits al­most 200 coun­tries, in­clud­ing China, the United States and the Euro­pean Union, to lim­it­ing tem­per­a­ture in­creases to 2 de­grees and wean­ing the world econ­omy off fos­sil fu­els.

The An­glo-Dutch en­ergy gi­ant, the world's third largest by mar­ket cap­i­tal­iza­tion, has bet heav­ily on a lower-car­bon fu­ture, with in­vest­ments in wind and re­new­ables capped by the $50 bil­lion ac­qui­si­tion of Bri­tish Gas in Fe­bru­ary.

Van Beur­den was also skep­ti­cal that reval­u­a­tion of re­serves af­ter the cli­mate deal could trig­ger a fi­nan­cial shock, say­ing that the oil price's col­lapse from $120 to $30 a bar­rel showed the in­dus­try's abil­ity to weather much larger shocks. "Each $10 fall costs us $5 bil­lion in cash a year," he said. "The fact that over the com­ing few decades we are tran­si­tion­ing, in a more or less or­dered way, to a low-car­bon so­ci­ety is less dra­co­nian than what we've seen over the past two years."—Reuters

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