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UpstreamOnline: Future vision puts renewables at core

SHELL has no plans to spin off or part sell its renewable energy businesses as rival BP is considering, and instead wants closer integration of the units with its core hydrocarbon operations, writes Christopher Hopson.

Chief executive Jeroen van der Veer said that Shell was building the green energy businesses for the long term, and dismissed concerns about the short-term value of the operations to share prices.

“It’s more basic than that… 50 years from now, we think about one third (of total energy use) will be from renewables,” he said. “You only build big businesses if you expect the profitability there.” Shell and BP are the leading investors among the international oil majors in renewable energy. Each has invested about $1 billion in the past five years.

BP’s chief executive Tony Hayward said last month he believed BP’s shares had not benefited from the investments. In an about-face from his predecessor, John Browne, he said he was examining ways, including a part flotation, to unlock the value in the operations for shareholders.

However, Van der Veer said Shell wanted to go in the opposite direction, bringing operations such as wind and solar power and biofuels closer to core units. “We think it is better to integrate it. Like biofuels, we think you should integrate it with oil products,” he said.
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20 March 2008 00:01 GMT  | last updated: 20 March 2008 00:01 GMT

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