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Shell says break-up of group would not work in real life -Breaking

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© Reuters. FILEPHOTO: Royal Dutch Shell’s logo was displayed at a launch ceremony for the hydrogen electrolysis plant located at Shell’s Rhineland refinery, Wesseling, near Cologne. July 2, 2021. REUTERS/Thilo Schmuelgen

By Shadia Nasralla

LONDON, (Reuters) – While splitting up Royal Dutch Shell Oil (LON) might make it financially attractive, Jessica Uhl from finance said that in practice this would be impossible.

Third Point hedge fund activist (NYSE:) has a substantial stake in Shell and called Wednesday for it to be split to improve its market performance.

Uhl stated to reporters that if you split it into parts, that could sound very interesting financially.

But in terms of actual solutions, that is what breaks down. Our ability to combine and bring together these pieces will make an impact on the energy transition.

Shell CEO Ben van Beurden stated to reporters that Shell’s strategy was coherent and understood well by the majority of shareholders.

Oswald Clint from Bernstein has an outperform rating for Shell. He stated that although a Shell minority listing might make sense financially, it would be detrimental to future earnings if the entire company was sold.

Top U.S. oil and gas companies have been increasing drilling, and are now receiving support from large investors. They don’t plan to invest in solar or wind energy.

EXPECTED RESULT LOWER THAN PERSUMED

Shell’s third quarter profit was $4.13 billion, lower than the analyst forecast of $5.31 trillion. Shell also set higher emissions reduction targets, with a goal to reduce its total emissions by half by 2030.

Prior to this, the company had only intensity-based targets for reducing emissions. Shell’s indirect emissions are dwarfed when you consider the emission from its products that its customers cause. These emissions, also known as Scope 3, can be compared with Shell’s total direct emissions.

Although the company pledged to be a net zero emissions company by 2050 it is now under increasing pressure. A Dutch court ordered that all its emissions, including Scope 3, must be cut by 45% before 2030.

Shell will appeal the court’s decision.

(GRAPHIC: Royal Dutch Shell’s profits – https://graphics.reuters.com/SHELL-RESULTS/egpbkmxawvq/chart.png)

LNG TO GROW IN Q4

This autumn, power and gas prices rose as tight supplies of natural gas collided in response to strong demand from countries recovering after the COVID-19 pandemic.

Shell saw its cashflow from operations increase by 54% to $16 Billion in quarter. This in turn allowed it to decrease net debt to $57.5 Billion, as opposed to $65.7 Billion in quarter précédent.

Company guidance called for a rise in liquefied LNG production from 8-8.6 millions tonnes to be achieved by the end of fourth quarter.

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