The world still desperately needs oil, insists Shell boss Wael Sawan

The chief executive of energy giant Shell yesterday defied climate activists as he insisted it would be ‘dangerous and irresponsible’ to cut back oil and gas production amid the cost of living squeeze.

Wael Sawan, who took charge of the FTSE 100 firm at the start of this year, rebuffed recent criticism of fossil fuel investment from the head of the United Nations.

His comments in a BBC interview are likely to further rile Just Stop Oil protesters who have stepped up their campaign of disruption by targeting the Wimbledon tennis tournament and the Ashes cricket series between England and Australia this summer.

Sawan had already caused dismay to climate campaigners when Shell said it would maintain oil production close to its current levels and ramp up production of natural gas – putting the brakes on the company’s switch to renewable energy.

Adamant: Wael Sawan, who took charge at Shell at the start of this year, rebuffed recent criticism of fossil fuel investment from the head of the United Nations

Yesterday he told the BBC that moves toward renewable energy were not happening fast enough to replace fossil fuels.

Responding to comments from UN Secretary-General Antonio Guterres, who branded new oil and gas investments ‘economic and moral madness’, Sawan said: ‘I respectfully disagree.

What would be dangerous and irresponsible is cutting oil and gas production so the cost of living, as we saw last year, starts to shoot up again.’

He cautioned that rising demand from China as it emerged from its strict Covid lockdown measures and a cold winter in Europe could push up prices, adding that the world still ‘desperately needs oil and gas.’

Sawan said Britain’s lack of energy policy and taxation, with UK-derived oil and gas profits taxed at an effective rate of 75 per cent until 2028, risked making it a less attractive place to invest and the Government needed to make a call on whether to rely more on domestic or imported energy.

Those comments are at odds with the views of the head of the International Energy Agency, a body that represents oil-producing countries.

Fatih Birol has said there could be ‘no new investments in oil, gas and coal from now on’ if national governments were serious about tackling climate change.

Sawan’s comments come after Shell’s strategy shift on the switch to renewables, which was announced last month.

That marked a change from two years ago when then-boss Ben van Beurden said that production would decline by between 1 per cent and 2 per cent a year this decade from a peak in 2019, implying output would fall to around 1.5m barrels of oil per day by 2030.

Eco fury : Shell says it will maintain oil production close to its current levels and ramp up production of natural gas

Rival BP has also rowed back on its plans for change.

In February it announced that it would cut oil and gas production by just 25 per cent between 2019 and 2030.

That was well short of its more ambitious previous target of a 40 per cent reduction, in an apparent U-turn by its chief executive Bernard Looney.

Despite its move, Shell has reiterated its target to become a net-zero company by 2050 and to invest between £8billion and £12billion over the next two years in low-carbon energy. 

Jamie Peters, the head of climate at Friends of the Earth, said: ‘It’s no surprise that a fossil fuel company like Shell wants to continue unabated extraction of oil and gas.

‘Let’s be clear, companies like Shell are fuelling both the climate crisis and the soaring cost of energy.

‘They are profiting from the misery of ordinary people while destroying the planet, and they’re making a cynical case to continue locking us into the volatile fossil fuel markets that are the root cause of the energy crisis.’