"Stranded reserves" due to climate change? Not likely, says Shell boss

 
Oliver Gill
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Right to the last drop: Ben van Beurden said Shell's extraction plans would not be affected by climate change (Source: Getty)

Royal Dutch Shell's (Shell) boss has said it will squeeze every drop of oil from its wells, shrugging off concerns that climate change laws could cap the amount it could extract.

Ben van Beurden said Shell would not have any "stranded reserves" – fossil fuels left in the ground because of carbon emissions limitations.

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"The company is valued on produceable reserves that we can produce in the next 12 or 13 years," he told Dutch newspaper Het Financieele Dagblad "We should certainly be able to produce those under any climate outcome. Even if global temperatures can only rise by two degrees."

The Paris Climate Agreement stipulates signatory countries must reduce their dependency on fossil fuels and commit to the limit global warming to an increase of two degrees Celsius. Almost 200 countries signed up to the accord, which came into force in November.

Market concerns were that the value of assets held on Shell's balance sheet might need to be reduced if the oil giant left fuel behind. Such a revaluation could have an adverse impact on bottom line profits.

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Meanwhile, Van Beurden also said falling oil prices costs the group billions in cash each year. However, he said, there would be no change in the group's dividend policy, even if it was paying out more to shareholders than it generated in cash each year.

"[Shareholders] want a stable dividend. We must be seen as reliable," he said.

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