Wednesday, 4 September, 2024 / Edition 23

My wife and I enjoyed spending the long weekend at Napa Valley to taste California wine with our kids. I hope all the Americas out there had a relaxing Labor Day weekend as well!

And congratulations to Kelsey Vanderschoot, our "editor-in-chief" for Well Read and AAPG’s other newsletters, for getting married last weekend!

Now, let’s get to two interesting energy news bytes.

Shangyou Nie

Editor, Well Read

Shell Will Cut 20 percent of Staff From its E&P Divisions

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Media reported last week that Shell is in the process of cutting 20 percent of staff in its exploration, strategy, and field development departments. This is part of CEO Wael Sawan’s continued focus on performance and cost cutting.

The latest:

• Reuters was the first to report that Shell plans to cut “hundreds of jobs” in its exploration and development divisions.

• Job cuts will include “technical professionals who originate and mature oil and gas opportunities.”

• Shell’s latest re-organization will most strongly impact staff in two divisions in Houston and The Hague. The London office will also be affected to a lesser extent, according to the Financial Times.

• No details on the exact number of job cuts or the timeline of the reorganization have been released.

What’s driving the cuts:

• Sawan promised to cut operating costs by up to $3 billion after he took Shell’s helm in January 2023. Last year, Shell’s OpEx totaled $40 billion.

• In early August, Sawan told analysts that the company has delivered $1.7 billion in OpEx savings thus far, according to the Financial Times.

• In October 2023, Shell had announced plans to cut some 200 jobs in its clean energy division. Ninety would be reassigned to other divisions, and 130 would be reviewed throughout 2024.

Shell’s performance in 2023 and 2024:

• Shell’s share price has increased by 23 percent from January 2023 to end August 2024, outperforming its major competitors.

• As of 30 August, Shell’s market cap stands at $223 billion, behind ExxonMobil’s $524 billion and Chevron’s $269 billion.

• Shell has narrowed the gap with Chevron since Sawan took over as CEO. Chevron’s share price is down by 16.5 percent since January 2023.

• Shell had 103,000 global employees as of December 31, 2023.

A message from AAPG Academy

Join AAPG Academy and Forvis Mazars on 10 September at 12pm CDT (UTC-5) to hear from experts Geoffrey Thyne of ESal and Cesar Vivas of the Geothermal Consortium at the University of Oklahoma, to learn how they successfully managed their contract and achieved technical success. Plus, hear from Evan Masters of Forvis Mazars about how you can outsource the tricky documentation and compliance pieces and better respond to funding opportunities in the future.

TotalEnergies Will Spend $100 Million to Acquire Carbon Credits in the USA

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On 30 August, TotalEnergies announced that it has signed an agreement to spend $100 million to partner with Anew Climate and Aurora Sustainable Lands to earn carbon credits. The partnership will deploy 20 projects in 10 American states for forest protection.

Project details:

• TotalEnergies has committed to investing $100 million annually for the next six years toward projects with more than 5 million tons of CO2 in carbon credits.

• The projects aim to reduce heavy timber harvesting in forests and to enhance forests’ ability to store more carbon.

• The projects will cover 300,000 hectares, in 10 states: Arkansas, Florida, Kentucky, Louisiana, Michigan, Minnesota, New York, Virginia, West Virginia, and Wisconsin.

• The projects will also help improve water and soil quality, biodiversity protection, and natural habitat conservation.

• The carbon credits will be used to offset TotalEnergies’ Scope 1 and 2 emissions.

• According to the WSJ, TotalEnergies has committed $725 million toward carbon offsets prior to 2024.

About TotalEnergies’ partners:

• Anew Climate was founded two years ago, as a global leader in climate solutions. It is majority owned by global investing platform TPG Rise Climate.

• Aurora Sustainable Lands is a climate-focused asset management company, which has acquired 1.7 million acres of U.S. forestland. It is a joint venture between Anew Climate and other financial sponsors.

• Aurora claims to have reduced harvest volumes by more than 50 percent on its properties.

• Aurora sold more than $100 million in carbon offsets to buyers in 2023 and 2024, including Microsoft.

• Microsoft is by far the world’s biggest buyer of carbon offset credits, ahead of companies such as Airbus, Amazon, BCG, JP Morgan Chase, and Boeing.

For more details around TotalEnergies’ efforts in sustainability, read this.

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✉️ To get in touch with Shangyou, send an email to editorial@aapg.org.