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Sustainable development and our business strategy

Shell is a global energy company that helps power and sustain people’s lives. We work with partners, communities, governments and others to help meet energy demand in economically, environmentally and socially responsible ways. This approach underpins the business decisions we make.

billion barrels of oil equivalent
Shell’s exploration resource additions – billion barrels of oil equivalent; (bar chart)

Sustainable development for Shell means balancing short- and long-term interests in a way that allows us to integrate economic, environmental and social considerations into the business decisions we make. It underpins how we develop and operate our projects and facilities, and the way we manage our supply chains. It helps us to improve the products we offer to customers. We share the benefits of our operations, including helping to develop local economies through supplier contracts and by creating jobs.

Our business strategy focuses on investing steadily to deliver more energy to our customers. We are growing our production for the future by finding and developing additional natural gas and oil resources. Sustainable development is a core part of this strategy. Governments, communities, customers, industry and non-governmental organisations each play a role in building a sustainable energy future. Building strong relationships with all is essential to the way we do business.

Our net capital investment will be around $30 billion in 2012. Around 80% of this will go to our oil and gas exploration and production projects to bolster energy supplies. As new projects come on-stream over the next six to seven years, we expect our production to rise to 4 million barrels of oil equivalent a day, up 25% from 2011.

As we deliver growth, our business strategy supports our contribution to addressing global CO2 emissions: supplying more natural gas for electricity generation, helping to develop carbon capture and storage, producing low-carbon biofuel for road transport, and working to improve energy efficiency in our operations.

The quickest, most affordable way to tackle the challenge of meeting rising energy demand with lower CO2 emissions is to replace coal with natural gas in power generation. We expect natural gas to account for more than half of our upstream production in 2012, and to continue to grow in the coming years.

Technology and innovation

Investing in the research and development (R&D) of advanced technologies continues to be central to our strategy. As we move into more remote locations and develop increasingly challenging resources, innovative technologies will help us deliver energy to our customers. In 2011, we spent $1.1 billion on R&D, more than any other international oil and gas company. Over the last five years we have spent $2.3 billion on developing alternative energies, carbon capture and storage, and on other CO2 R&D. We are also investing in the major Raízen joint venture, our first involvement in the production of low-carbon biofuels.

Our work with other companies and research institutions on advanced biofuels from non-food sources is part of our development of future energy technologies. We also continue to work on finding new ways to improve energy efficiency in our operations through advanced technologies.