Treasury

Daily treasury operations include management of foreign exchange for the different currencies that are needed by Shell around the world. Treasury also advises on the financing of Group subsidiaries and joint ventures and manages the Group’s surplus funds and external bank accounts. It is also responsible for issuing external and internal guarantees to ensure contractual and regulatory obligations are met and that Shell’s licence to operate is maintained.

Oil, gas and renewables projects, which can take years to develop, need significant capital. Our operating companies require a balance between equity and long-term loan funding. We have capitalised Group lending entities in the Netherlands, the UK and Singapore to provide the loan financing. We ended our Swiss and Bermudan lending activities in 2019 and mid-2020 respectively, after reviewing their presence in these low-tax jurisdictions.

Treasury reviews the funding needs of Shell’s operating companies around the world on a case-by-case basis to ensure there is an appropriate mix of equity and debt. Treasury manages deposits from operating companies that generate cash. This cash, the returns from operating companies plus external debt, is used to provide long-term funding including loans with interest due and paid as if these loans had been sourced from external financial markets or institutions.

Related party lending, borrowing, guarantee offers and acceptance, and governance processes are decided by the boards of the Shell lending and borrowing companies respectively, independently and on a standalone basis.