Shell CEO Wael Sawan attends the China Development Forum, in Beijing, on March 25, 2023.THOMAS PETER/Reuters
Shell SHEL-N shareholders on Tuesday re-elected Chair Andrew Mackenzie and CEO Wael Sawan, who said when asked about a potential deal for rival BP BP-N that the bar for mergers and acquisitions was very high.
Media reports earlier this month suggested Shell was working with advisers to evaluate a potential acquisition of BP, whose shares have lost around 26 per cent of their value in the past year versus Shell’s drop of 12 per cent.
Sawan won the support of 98.7 per cent of shareholders at the group’s annual general meeting and Mackenzie of 91.4 per cent. In contrast, BP Chair Helge Lund only received around 76 per cent at its AGM after years of share underperformance, and is set to leave his post in the coming months.
Echoing previous comments when asked about media reports that Shell was studying a bid for BP, Sawan said Shell’s current share price makes buybacks an especially attractive way of spending money. Mackenzie told reporters he endorsed everything Sawan has said on the topic.
An activist resolution asking Shell to provide further information on its expectations for huge liquefied natural gas demand growth underpinning its LNG sales target, and how this is compatible with goals to cut carbon emissions, received around 20.6 per cent support.
The level of votes cast for the resolution requires the company to consult shareholders further on the issue within six months, Shell said.
“LNG will be the biggest contribution Shell will make to the energy transition,” Sawan told shareholders, pointing to the option of replacing more polluting fuels like coal with gas.
“LNG is a versatile low-carbon fuel that is going to be essential for the energy transition.”
The majority of natural gas is made up of methane, a greenhouse gas and significant contributor to climate change alongside carbon dioxide.
“We continue to raise concerns about the lack of visibility around Shell’s pathway to net zero post 2030,” said Vaishnavi Ravishankar, head of stewardship at Brunel Pension Partnership.
Brunel is one of three institutional investors who co-filed the resolution alongside the Australasian Centre for Corporate Responsibility, which together represent around 0.25 per cent of Shell’s shares, according to a Shell spokesperson.
All other Shell board members, including Finance Chief Sinead Gorman, were also re-elected.