Shell’s CEO talks transformation, leadership, and the future of energy

you reflect on geopolitics, on trade, on climate, on AI. All of it is moving at a pace where I think it's unprecedented. We have a duty to make sure that as all of these intersecting vectors play out, that we are there to support our customers as they try to navigate this difficult and complex landscape. We want to become much more competitive. We want to become much more focused. Good is not good enough. We need to create that best version of the company that we aspire to. Hello and welcome to the Energy Podcast from Shell, the home of conversation about the energy that powers our world. I'm Bryony. And I'm Eddie. And how is it that we have come to the end of the season already? It's crazy. It feels like just yesterday we were having our first conversation around the energy transition. You know, what's your favorite episode that we've had so far? Difficult to choose a favorite. I think our conversation with Shell's president of integrated gas, Cedric Kremens, about LNG. And that's because there's been so much debate around it. And it's role in the energy transition. I think putting challenging questions to him was really interesting and important. And also the episode about decarbonisation of passenger cars and talking to BMW. Yeah, that was awesome. That was good. What about you? Oh, I mean, that's super easy for me. It was the conversation about our new advanced sustainable race fuels was good for our HP, for sure. For sure. I mean, you do like to talk about Formula One at any given opportunity, don't you? Any excuse. Yeah, that was good. Today, though, we're going to be speaking to, I think the person that will perfectly wrap up the season. Yeah, absolutely. I mean, we've been trying really hard to get them. It's our CEO while so on. And I think it's going to give us a chance to step back. Look at the bigger picture. Look at some of the big shifts and shocks that are happening in the world and what that means for the energy system. And of course, he's the perfect person to talk about Shell's role in that system as well. Absolutely. He's at the centre of it all. He's been Michelle for 28 years, I think, actually. He's been CEO for three of them. And he's Lebanese Canadian. He's also the first non-European CEO of Shell. What else do I know about him? He's also a huge football fan. Soccer. Football. Soccer. Before we start, a quick note to say that when we say Shell or we, we're talking about Shell PLC and its subsidiaries in general, the companies in which Shell PLC directly and indirectly owns investments are separate legal entities. Okay. Let's get to it, shall we? Let's do it. Well, welcome to the energy podcast. Thanks so much for joining us today. Thank you very much for having me and great to be with you both. Yeah, you're certainly one of the toughest bookings that we've had all year. Hardly, I'm sure you've had some great acts before me, so I'm really keen to be here and to see what's on your mind today. Well, we did in the intro say that your introduced you as a really big football fan. And I think we should clarify because we do have a bit of kind of UK, US back and forth on this podcast. Is it Premier League football? Are we talking NFL? I'm going to give you the diplomatically correct answer. Yes, for them. Both. I'm a big fan of NFL. My boys and I are big New Orleans Saints fans. And we're also big big fans of international football or soccer to some. I'm a Liverpool fan. My kids are more Arsenal fans and therefore we constantly look for some level of harmony in the household as the two as the two compete, even the Arsenal as well ahead these days. There's lots of sledge in going on in your house. I think it's what you constantly constantly. Look, there's tons of big questions that we have to let's get straight to it. Thanks. Are we coming towards the end of the year? And it's been a year marked by geopolitical upheaval, big trends converging. And of course, you've had a great vantage point of all of those things. I wonder what surprised you the most about the last 12 months. And I'm really interested to know what you think has been the biggest challenge over that year as well. Look, I think the pace at which things are moving is difficult to fathom. You reflect on geopolitics, you reflect on trade, reflect on climate, reflect on AI. And all of it is moving at a pace where I think it's unprecedented. And energy, of course, is at the intersection of all of these different trends. And so my reflection over the past year is our role as a company, as Shell, as a sector. It's just become more pronounced. We have a duty to make sure that as all of these intersecting vectors play out, that we are there to support our customers as they try to navigate this difficult and complex landscape, that we are supporting our government partners, that we are supporting our customers as they try to figure out what to do here. So on balance, I think it's more of an opportunity than a challenge that I see. But it does mean continuing to reinvent ourselves in the context of what's happening. People often wonder how CEOs like you handle tumultuous times like these. And for you, your Lebanese Canadian, you've moved and traveled all over the world. So I'm curious, how does that life experience help you in this role, particularly in a world in a sector of often polarized views? I think you have to start with having resilience, inner resilience. And to me, part of that comes from family. Part of it comes from recognizing that I need to focus on what I can control while absolutely absorbing the many things that I can't control around us. And in essence, that's what we're translating our focus into a Shell. We're looking at what are the things we can do to be able to navigate that uncertainty. Things like becoming just leaner, fitter, more competitive, getting a healthier balance sheet, because the world is cyclical and the biggest thing we can do is to make sure that we are fit for those times of uncertainty that come upon us. I think that's an interesting point, right? Being fit for those times. Your vision for Shell, in 10 years time, is to fit to be the world's leading integrated energy company. And you said that before. But what do you mean by that? And imagine, you know, we skip forward a decade. What do you think Shell looks like? Let's start with where we are today. We've been making really strong progress. Just take a look at our Q3 results recently. We've been able to deliver outstanding performance in our integrated gas and upstream businesses. We had one of the best quarters that we've ever had in marketing. And we are making progress across the patch, whether it is on the discipline that we are demonstrating on capital deployment, so 20 to 22 billion dollars of capital a year, whether it's on cost, where we had promised to deliver two to three billion dollars of structural cost reductions by end of 2025, and we're already at four billion dollars by middle of 2025. All of that, I think, shows the momentum and the pace that we are building at the moment. And then if I project to the future, all of that is in service of creating that portfolio that we have talked about, to be the leading gas and integrated gas player in the world, to sustain liquid production through to 2035. To be the most customer-focused energy marketer and trader, really focused on the key areas where we can create value for our customers. Bringing all that together by 2035 and beyond and really positioning us to be that leader in the energy sector is a vision that we share as a leadership team and that we are driving the company towards at the moment. As you reflect on your time as CEO, what's the thing that's pleased you the most? Earlier this year we had an investor, Rocho, and we brought back the you can be sure of Shell, a tagline that is decades old, and at the heart of it is in essence a promise that this is a company you can trust. This is a brand that you can trust. And I mean it from every perspective, a customer can trust that Shell is going to deliver for them. An investor can trust that Shell is going to give them the returns they expect. A partner, a government can trust that we are going to be there when they need us. We've been working hard over recent years to be able to re-earn that trust. And I think at the heart of it is just doing what we say consistently. That's what's made me really proud that you can be sure of Shell is being used more and more. Anatomy is a core element of our license to operate. To exist is that people trust that we will do what we say we're going to do. Where do you think there's still the most work to be done? I think there is still a long, long way to go for us to get to our total promise, right? I think we are still becoming leaner and fitter and I don't think we've gotten to that to that point yet. I think there are elements around how we are able to simplify how we work as an organisation to be able to achieve what we are aiming to achieve. I think in our ways of working with the external world, we can also simplify how we do things. And so I do think there are multiple different areas where we can do better and where we are leaning into to become that better version of ourselves. I wonder if what you're talking about there is kind of related to culture. broadly. So that's the sort of, I guess that intangible that's in any company, but it's kind of crucial when it comes to change inside a company. Do you think Shell's culture is changing and if you do, how do you think it's changing? We come from a very strong place. Part of the reason I joined the company is the incredibly strong set of values that we hold as a company, right? Honesty, integrity, respect for people. Do we get it right every single day? Absolutely not. But we aspire to greatness in those values. And that creates a core of a culture that I think makes us who we are today. But there are also layers we're trying to add to that cultural foundation. For example, we want to become much more competitive. I think we recognize that simply spreading ourselves to thin is not the right answer. And that good is not good enough. And if you were to ask me what is maybe one element that is still an area where I hope we can actually move forward, it is that learning culture. It is our ability to move from an all-knower to an all-learner. Because the world is moving at a pace that is fast, we need to be able to continue to learn and adapt. And that does mean sometimes challenging maybe the paradigms of past to be able to embrace the opportunities of the future. Can you give us an example of that learning culture that you're talking about? There are multiple examples I see at the moment whether it is people learning from failure. So whenever we have an incident, for example, at a facility, I'm seeing more and more and appetite and actually looking positively at some of those failures so that we can become better. We've also learned it from a portfolio perspective. We went into renewable generation, for example, investing in a space where we thought we could differentiate. But we found that we weren't able to create incremental returns over what others were doing. And so what we have now said is we will focus on that part of the value chain and power that we are particularly adept at creating value from. So I think there are multiple examples there that we need to just continue to embrace, both at the corporate level but also on a personal level as I continue to look at how I can learn and how I can become a better leader for the company. While you just mentioned something right there when you were talking about culture to be competitive and you came up a little bit in the theme as well when you were talking about or you can be sure of Shell, capital discipline or investing our money wisely. Do you feel that we're too focused on the short term and can you see where the growth in Shell comes from post 2030? I think short and long term have to always be seen together. We have to be able to actually earn the right to play in the long term by demonstrating that we are winning in the short term. That means investor returns, it means building that trust with governments and with our customers. That is a core part of the legitimacy that we need to be able to play longer term. But you rightly, I think, to the context of the question. You rightly point to the fact that one also needs to invest in the future, which is why over recent years we have, in essence, invested 20 billion dollars of capital employed that is now going into what I would call forward leaning lower carbon opportunities. At the end of the day that we have to play to our competitive strengths, we have to make sure that we're not just playing for the sake of being in a particular energy form. We have to be able to demonstrate that we can be a leader in that area. Let's talk about stocks because I think that's an important part and you mentioned that kind of investor returns as well. So stock markets today are kind of riding iron tech stocks really. So acknowledging that there's more still to do to transform Shell. Why would people buy Shell today? First, I'm really pleased that we are seeing a very positive response to the journey that we have been on in recent years with at performance vis-a-vis our peers when it comes to Shell's share price. But we haven't fully reached what we think is the underlying value in the company. So why should investors bias? I think firstly we are now establishing a track record of consistent delivery. That's important. Investors want to know that they can trust the companies to in essence follow through on what they promise. And I think we're doing that. We are rewarding our investors with distributions of 40 to 50 percent of our cash flow from operations, which is a healthy return. At the same time, we continue to invest in differentiated projects. We are investing close to 22 billion dollars every year to be able to build that capacity for future cash flow. We are also growing our free cash flow per share, an important metric by 10 percent per year between now and 2030. That growth is mostly unrelated to oil price. It is just doing better with what we have internally. To Shell, LNG could be our biggest contribution to the energy transition over the next decade. Some of the media have spoken about how 2026 is potentially long LNG or oversupplied in LNG. And additionally, some commentators have suggested that the use of coal and solar as alternatives could squeeze the demand for LNG, potentially making it a bridge to know where. So maybe my question to you there is where does Shell's confidence in LNG come from? Well, look, it's a great question. I think let's start with where is gas being used today in particular LNG? You touched on coal and solar. Power is one segment where gas is being used. In particular, actually, as a steady form of energy that is there adjacent to renewables to be able to support the interruptible nature of renewables and provide a sustainable consistent energy source. But actually, a big part of where LNG is being used is in areas like industry as a replacement for coal bringing down emissions from some of those facilities. It's being used as a replacement for diesel and transportation. It's one of the largest growing energy forms at the moment in supportive shipping, but also in support of trucking in areas like China and India. So LNG is playing a critical role in bringing down emissions today. And I've often said, as you started off by saying, actually, one of the biggest contributions we will make to the energy transition is the growth in our LNG port for you over the coming years. I think a couple of things like that to that as well. I mean, LNG today is a critical source of energy for multiple countries and will become even more so in the future. And when one looks at the cyclicality of the industry, we one doesn't just look at the next two, three, four years in terms of the cycles of supply and demand. We have to look beyond that. And when we look at the 2040, we see the potential of growth in the LNG market being over 60%. So we are building for what is going to be a sustainable and I suspect a significant growth in that demand over the coming years. There are important cardrails we need to have, one of which is reducing methane emissions as we ensure that we are supplying the world with that LNG. That's something we're very focused on. We've already reduced methane emissions from our own operations by over 75% over the last decade. And there is more to do there. So I do think LNG will play a critical role and shall once the lead in that space as well. Let's just stick with tragedy in 2026 for a moment and that external commentary as well because there's widespread expectation amongst commentators that all prices will fall in 2026. At what point do you and Jean-Aid, Shell CFO, get together and think should we be worrying about the resilience of Shell's balance sheet? We focus on what we can control. For the last few years, what we have been doing is becoming more and more resilient, improving the cash flow generation from our own businesses but also importantly building a more resilient balance sheet and today we have one of the strongest balance sheets in the sector, less than 7% gearing at the moment excluding leases which makes us one of the strongest. We are in a place where we continue to be ready for whatever comes our way. We do see a credible scenario where oil prices are softer in 2026 as a result of supply demand and balances. But we look through that. We look to the future and we look at how we can continue to build the strength both in our operational performance and that balance sheet to be able to navigate whatever comes our way over the coming years. While you just talked about the resilience of the balance sheet, both of us understand assets very well. So maybe a word on the resilience of the assets as well. Yeah, so a big part of building resilience in an enterprise is making sure that your assets come in at the low end of the cost curve. Take our recent whale sparta investment that's ongoing at the moment which are in essence replicas of another one of our existing producing assets, Vito. What we're trying to do is to be really low at the cost curve so that irrespective of how low oil prices come in, the cash margin coming out of those assets is resilient. That's what we're trying to do actually across our portfolio. Build assets that are able to withstand the lower ends of the cycle and to create value at the higher end of the cycle and that's what we're building at the moment. As viewers from previous episodes know the Global energy demand is projected to continue to rise, but the natural oil fields and gas fields production over time decreases. You've set limits to investment that could go into additional exploration and production of those assets. Is Shell investing enough to sustain output well into the future so that we have that flow that we need for this energy transition? So big part of our strategy is to sustain our liquids production as well as to grow our gas production over the coming years. And we are very well positioned to be able to do that. Over the next five years, we will be investing in capacity to the tune of around a million barrels per day at attractive break even points of around 35 dollars or just under that per barrel. So we are investing in that space. We're also investing in exploration opportunities. Just recently we signed Angola License Blocks, for example. We continue to explore in areas like South Ome where we look at the opportunities for future supplies. We are really focused on the basins where we think we have a differentiated advantage, which we are in a basins which we understand, particularly areas like the North Atlantic, Atlantic margin in general is somewhere where we have good experience from our position in the Gulf in the US, but also our position in Brazil, our position in Nigeria. And so we are really focused on those areas where we think we can bring value and hopefully create the runway for future production to be able to, indeed, manage some of those declines, those natural declines that come from existing oil fields and gas fields. So staying with investment, and you touched upon this earlier, but Shell has around 20 billion of capital employed or invested in power, both renewable and gas fired, as well as lower carbon businesses such as BioFuse, Hydrogen, and CCS. And we've spoken about all of those things on this podcast over this season. But what do you expect to see in return for those investments? I'd like to be able to make sure that we are the natural owner of those assets, whatever they are. We need to be able to demonstrate that we are the ones who have the competitive strengths to be able to create more value than anybody else can with those assets. The 20 billion dollars that we have invested allows us to be able to test different investment opportunities, different investment thesis. And that's what we're doing at the moment, which is exciting because it allows us to actually explore new business models and look at where we can create value out of some of our capabilities, our customer connections, our trading capability, the asset basis that we have. And so what we expect to get out of that is differentiated returns. At the moment, we're talking about having north of 10% return on that 20 billion dollars of capital employed. That's what we're striving to be able to achieve by 2030. And then over time, I'd like to be able to demonstrate that in a few key areas. One, which we're looking at at the moment is CCS, for example, and what we can do in that space, as well as biofuels. What we can do in biofuels and bio gas. So there will be some exciting opportunities to go after over the years. I'm sure. Yeah. So you just talked about CCS. I want to stay there for a second, because we've talked quite a bit on the podcast this season about scaling complex technologies like CCS, the technology, the policy, the customers, they all need to be in lockstep, which isn't always the case. At Shell, you've had to make tough decisions. For example, not to restart construction of a planned biofuels facility in the Netherlands, in part because the market wouldn't have made it competitive. Are the markets for these lower carbon solutions emerging more slowly than we would have expected? I don't want to generalize it because I do think the reality is different markets are evolving at different places in different places as well. And so what I see at the moment is back to your earlier point, it starts with the confluence of multiple things, technology evolution, the enabling policies, the customers having the appetite to be able to pay for that lower carbon energy source, which typically has been slightly more expensive than the alternative. And you need all of those factors to come together in a place like the Netherlands where we were trying to build a hefa plant, which is a biofuels facility in essence. Part of the reason we stopped it is exactly that point around we couldn't see a pathway to a competitive project that was going to meet the affordability of what our customers were willing to pay for that product. And that's why we took the tough but necessary decision to pause it. If I take another example, we have recently taken a final investment decision on a second phase of a CCS project in Norway, a project that has been enabled by the support of the Norwegian Government, with a group of customers who have committed to be able to, in essence, inject their CO2 into that reservoir. And partners ourselves, Equinor and Total, who came together to be able to invest in that project. So there are opportunities, but it does require multiple elements to come together. It's really interesting. We actually spoke to one of the customers on this podcast, it was a really good episode. I want to go back to the sort of the start of the conversation, because we kicked off with this big degree of change and the seismic events that have happened not just in 2025, but prior to 2025 as well. And a result of that, as you know, is that energy security has gone back up to the agenda or been introduced and gone up the agenda quite rapidly. So in that context, does Shell's commitment to its energy transition targets changed? No. So we continue to fundamentally believe that the world requires a balanced energy transition. What does that mean? It means the world needs energy security. It means the world needs affordable energy, and it does mean the world needs to be able to continue to invest in opportunities to create lower carbon energy for the future. All of that needs to be true. And so what we have said is we have some very clear targets out of 2030, where we have line of sight delivering those targets. We had a target of eliminating routine flaring from our upstream operations. And the beginning of this year, we met that target, beginning of 2025. And that was five years ahead of the World Bank ambition of meeting that target by 2030. We also have what we call scope one and scope two, as well as scope three targets. Those are, in essence, emissions targets from our operations, from energy we're importing to our operations, but also from our customers emissions. And what I can say is we are well on track on all of those targets. But targets are one thing, continuing to make sure that we are building the runway for even further ambitions is key. And that's what we are doing with some of the capital we talked about investing in those low carbon opportunities for the future. As if the energy transition wasn't enough in itself, artificial intelligence promises the possibility of unprecedented change. Given everything that it might mean for the way the world works, what are the implications of AI for the energy systems specifically? Well, let's start, Eddie, by humbly submitting to you that we are still learning. We are still really early in the wave of AI that's coming through. And we're just trying to grasp the opportunities and the possibilities that AI brings. I think a couple of sort of early thoughts. One is AI is going to be a game changer in terms of energy demand. And so we have an opportunity to be able to support many of these hyperscalers that are driving data center growth by supplying them the energy they need. But AI is also going to play a massive role in the way energy gets distributed in the way we build projects, for example, to be able to produce energy in the way we unlock our reservoirs, subsurface, and how we translate mountains of data into insights that allow us to make sure that we are much more effective in the way that we are producing those reservoirs or just enhancing the productivity of individuals, how I work, how I interact with data on a day-to-day basis and what AI can do. I think there are some incredible opportunities out there and what we need to do is to keep an open mind as to how AI can transform our business because we will be at the heart of it in so many different ways. I'm really looking forward to what comes from it. Are there any examples today where you see the potential for growth in AI? So take what we're doing in the U.S. at the moment through our Savion Renewable Generation Entity where we have recently partnered up with a fund to be able to offer power to data centers as we support them, so selling that renewable power to multiple hyperscalers. Recently here in the UK we signed up to be Google's renewable power provider of choice across all of their port for you, all of their data centers here. Actually leveraging what we call flex batteries, essentially battery storage, gas-fired power as well as renewable power to be able to help them achieve net zero emissions from their energy demands. Those are the areas where I think we are particularly well positioned from our customer interactions through to our assets and our trading and optimization capabilities. The package opportunities for our customers to be able to depend on us to provide them their energy that they need. of your third year CEO. And I know that you've been at Shell for a long time. I think about 25 years before that. And I know you had leadership roles before you assume the CEO role as well. But just sort of talking about leadership, because I think it's something that is just great to have you here to give your, you know, your insights, a leading shell. I mean, our audience would have heard us talk about performance, about discipline, about focus, all three of which you've mentioned a couple of times. Where do the traits, those leadership traits come from in you? Can you trace them back to your roots? I suspect it comes from sports. I've always been passionate about sports, particularly soccer or football. And I had the opportunity to captain my school team when I was younger. I've always had this desire to win, particularly as a collective. I've always favored more of the group sports, team sports, where you can actually win together and suffer together when we lose. So I suspect there's something to do with it. I'm also an avid reader of history. I love to read autobiographies of great political leaders, corporate leaders, and there are some common threads many of which you've already touched on. Those leaders typically focus. Those leaders typically exemplify discipline. They exemplify consistency in the way they show up and in the way they deliver. And I've always aspired to that as a leader, to be able to do better, to be better, to learn from those who came before us what good leadership looks like. And I'm convinced that companies like ours, if we are able to show that focus, that discipline, that competitiveness, and live up to the core values that we espouse, we're unstoppable. We can create unbelievable things. So one of those books will be in your stocking, Christmas stocking or your holiday season gift. I have no doubts. My kids know what I like. While it's interesting to hear you talk about your aspirations. And as we come to the end of the year and we're about to move into 26, it's common to look forward as to what do you aspire for the next year. So I'm interested. Maybe what are your New Year's resolutions? Not just for Shell, but also for yourself. Let me start with myself. For the last three years as CEO, I've reflected on how I can be a better CEO for the company. And the biggest commitment I've made, which I will, I suspect, re-contract with myself at the end of the year, is to continue to have the appetite to learn and to develop and to grow. In so many different ways, how can I be a better leader for Shell in this phase of the journey? How can I actually start to adopt some of the technologies we touched on earlier? AI and the like, how do I continue to make myself available to travel to multiple locations to be able to see some of the challenges that our people are going through? And so my resolution is a commitment to self-improvements. And hopefully that is one that will be there for a long time to come as I continue to grow in my role. As a company, we are absolutely committed to making sure that we play our part to be able to support our customers in getting the energy that they need, support our investors in making sure that we are able to deliver the returns they expect. And our partners in making sure that they get the Shell that is able to support them on their journey, irrespective of where that is. Well, thanks so much for joining us today. Thank you very much for having me and great to see you both. Really appreciate it. Thanks, guys. Thanks again to while for joining us. What a perfect way to end the season. Yeah, absolutely agree. If you missed any of our previous episodes, you can catch us wherever you get your podcasts, or you can watch us on YouTube. Remember, you can find Shell's cautionary note and reference from today's episode in our show notes. So we'll be taking a short break here on the energy podcast, but we will be back next year with some brand new episodes. Absolutely. And from all of us at the energy podcast team, thank you so much for joining us. See you in 2026. [BLANK_AUDIO]