Producing oil and natural gas
We believe our annual oil production peaked in 2019, and we expect our total oil production to decline by 1-2% a year until 2030.
The most ambitious scenarios show that as the energy system transitions, the world will continue to need oil and gas for decades. We are focusing our Upstream activities on fewer, existing positions and on generating value over volume.
We expect an annual decline in oil production because we are reducing the level of our investment in Upstream production activities. Emissions from our Upstream operations make up a small proportion of our overall Scope 1 and Scope 2 emissions, and they have already reduced by more than 25% since 2016.
Natural gas, piped and liquefied natural gas (LNG), provides lower-carbon energy. The IEA estimates that global natural gas operations have an average methane leakage rate of 1.7%. At this rate, natural gas emits over its life cycle around 45% lower greenhouse gas emissions than coal when used to generate electricity. Natural gas can also make a significant contribution to lowering greenhouse gas emissions in industries, such as the iron and steel sector, where switching to natural gas from coal could lead to around 36% lower emissions.
Read more about our oil and gas production volumes in the Annual Report.
Read more about natural gas at www.shell.com/energy-and-innovation/natural-gas.
Shale oil and gas
We work to unlock shale resources safely and responsibly through strict adherence to our Onshore Operating Principles of Safety, Air, Water, Footprint and Community. We conduct our operations in a manner that aims to protect air quality and reduce emissions. For example, we are implementing greenhouse gas abatement projects for existing and new facilities, such as using renewable power supply and energy efficiency improvement initiatives.
In September 2021, we reached an agreement for the sale of our shales business in the Permian Basin, USA. The transaction was completed on December 1, 2021, transferring Shell’s interest in the Permian to ConocoPhillips. As a result of this divestment, Shell's remaining activity in shales production is in Canada and Argentina.
Read more about our shale oil and gas production at www.shell.com/energy-and-innovation/shale-oil-and-gas.
We do not plan to pursue new oil exploration leases offshore in the Arctic Circle. We hold interests in a small number of exploration licences in Arctic areas of the USA, Norway and Russia. We evaluate other opportunities on a case-by-case basis, in line with our strategic objectives.
We intend to exit our interest in the Gydan joint venture with Gazprom Neft (Shell interest 50%) to explore and develop blocks in the Gydan peninsula, in north-western Siberia. The project is in the exploration phase, with no production.
Read more about our activities at www.shell.com/sustainability.