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Sustainable development and our business strategy

Energy sustains our daily lives and powers progress around the globe. Sustainable development for Shell means working with governments, partners, communities and others to deliver more energy in economically, socially and environmentally responsible ways. This approach helps shape the business decisions we make.

SHELL’S EXPLORATION RESOURCE ADDITIONS billion barrels of oil equivalent
Shell’s exploration resource additions – billion barrels of oil equivalent (bar chart)

Note: Excludes mergers and acquisitions

As the world’s population rises and the demand for energy grows, we must meet the needs of our customers and partners against a backdrop of economic volatility. We face increasing competition for access to energy resources in a world where environmental and social pressures are mounting. Our approach to sustainable development underpins the responsible way we work.

In developing energy projects and operating our facilities, we must balance short- and long-term interests. That means integrating economic, environmental and social considerations into our business decisions from the earliest stage. This approach is crucial to our success. It helps us develop projects without delays, and minimise the environmental and social impacts of our operations. It also enables us to better share the benefits of our activities, such as creating new jobs and contracts that help boost local economies.

Producing more natural gas

Increasing the use of natural gas will help build a sustainable future energy system. Replacing coal with cleaner-burning natural gas for power generation is the quickest and most affordable route for many countries to meet their CO2 reduction targets. In 2012, we produced almost as much natural gas as oil, and we continue to invest in developing natural gas resources (see chart above). Shell expects global demand for natural gas to increase by 60% by 2030 from its 2010 level, reaching 25% of the global energy mix.

We will continue to develop oil and gas projects to help meet rising energy demand. We are moving into increasingly challenging environments, using advanced technologies and finding creative ways to access difficult resources.

To support our overall growth in delivering energy, we expect to have a net capital investment of around $33 billion in 2013. Around 80% of this will go to our oil and gas exploration and production activities. As new projects start up over the next four to five years, we expect our production to rise to 4 million barrels of oil equivalent a day. This is an increase of 23% on our production in 2012.

Technology and innovation

Innovation and the development of advanced technologies are central to our strategy. Cleaner, more efficient technologies will be crucial as we explore for and develop resources in ever more challenging environments. In 2012, we spent $1.3 billion on research and development (R&D), more than any other international oil and gas company.

Over the last five years we have spent $2.2 billion on developing alternative energies, carbon capture and storage, and on other CO2-related R&D. We produce low-carbon biofuel through our Raízen joint venture in Brazil, and we are helping to develop advanced biofuels for the future from non-food sources.