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Shell Energy’s Failing Business Draws Feeble Interest from Rivals

Shell Energy’s Failing Business Draws Feeble Interest from Rivals

Posted by John Donovan:  May 12, 2023

In a desperate attempt to salvage the sinking ship that is Shell Energy, three of Britain’s largest power providers have reluctantly shown some interest in acquiring the oil giant’s floundering UK retail business, which has been drowning in poor returns for quite some time, according to sources close to the process.

Octopus Energy and Ovo have submitted bids for Shell Energy, but let’s be honest, it’s more like vultures circling their dying prey. British Gas, the retail arm of Centrica, also threw in a half-hearted bid, although it remains uncertain whether they have any genuine interest.

Shell and Centrica, perhaps embarrassed by the whole situation, declined to comment, while Octopus Energy and Ovo conveniently ignored all requests for comment. Seems like they don’t want to be associated with this sinking ship either.

Let’s not forget that Shell Energy came into existence by snatching up failed competitors, desperately trying to stay afloat in a market that’s rapidly moving away from the dirty fossil fuel business. With nearly 1.5 million customers, it’s no wonder this venture has been nothing short of an utter failure.

Determining the worth of this trainwreck of a business is a challenge, mainly due to the fact that nobody in their right mind wants to touch it. After the turmoil caused by Russia’s invasion of Ukraine and the ongoing chaos in power prices, there’s little confidence left in the future of Shell Energy. Sources indicate that the valuations could range from a pitiful $50 million to a laughable $100 million. Frankly, it’s a wonder anyone is even willing to pay that much.

Shell’s CEO Wael Sawan, who inherited this sinking ship, put the British, German, and Dutch energy retail businesses under review, conveniently blaming the “tough market conditions” for his company’s abysmal performance. But let’s call a spade a spade – this is just a desperate attempt to salvage what’s left of Shell Energy’s tarnished reputation.

To add insult to injury, Shell had to pump in nearly $1.5 billion of cash and credit into their British energy retail business just last year, desperately trying to keep their heads above water. Spoiler alert: it didn’t work. In their most recent financial report, Shell Energy reported a humiliating operating loss of 102.4 million pounds ($129.2 million) in 2021.

Octopus Energy, swooping in like a vulture to feast on the remains of their competitors, last year acquired the now-defunct Bulb, a testament to the disaster that is the energy market. Not surprisingly, several rivals, including British Gas, have challenged this acquisition, because why not kick a company when it’s already down?

It’s a pitiful sight to witness the downfall of a once-mighty oil giant like Shell, now clinging to the wreckage of its failed energy retail business. It’s a story of incompetence, mismanagement, and a company desperately struggling to adapt to a world that has moved on from Shell’s polluting practices.

I have had a swarm of websites focussed on Shell Energy pointing out the terrible customer service inflicted on people who bitterly regretted signing up for its products such as Shell Broadband.

Devastatingly bad reviews published on Trustpilot and broadband.co.uk provided a daily supply of ammunition to fire at Shell. Management seemed transfixed, like a deer caught in headlights. Something had to give. Shell decided to abandon ship.

Shell is invited to point out for correction any factual inaccuracies and if it wishes, supply closing comments for publication as part of this article on an unedited basis.  We cannot be fairer than that. 

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