Our strategy

Our strategy

Shell’s strategy seeks to strengthen our leadership in the oil and gas industry, while positioning the company for growth as the world transitions to a low-carbon energy system. Safety and environmental and social responsibility underpin our business approach.

In February 2016, Shell completed the acquisition of BG Group, adding significantly to our activities in liquefied natural gas (LNG) worldwide and deep-water oil and gas production in Brazil.

Shell’s strategy is now centred on creating a simpler company, one that delivers higher, more predictable returns and growing free cash flow per share. By investing in compelling projects, driving down costs and selling non-core businesses, we will reshape Shell into a more resilient and focused company.

Shell ambition:

  • World-class investment case
  • Relevant in our industry + growing value share
  • Reducing our carbon intensity
  • Shared value

Our business

Our business

Shell’s business is divided into three areas: Upstream, Integrated Gas, and Downstream.

Upstream is responsible for Shell’s conventional oil and gas businesses around the world, deep-water and shale oil and gas. It explores for and extracts crude oil, natural gas and natural gas liquids.

Integrated Gas manages Shell’s manufacturing and distribution of LNG and gas-to-liquids products. New energies invests in low-carbon energy such as biofuels, hydrogen, wind and solar power.

Our Downstream business manages Shell’s refining & trading and marketing activities for oil products which are sold around the world for domestic, industrial and transport use. In addition, we produce and sell petrochemicals for industrial customers. 

Our Projects & Technology organisation manages the delivery of our major projects and drives research and innovation to develop new technology solutions. 

1. Exploration

  • Exploring for oil and gas: Onshore and Offshore

2. Development and extraction

  • Developing fields
  • Producing oil and gas
  • Extracting bitumen

3. Manufacturing and energy production

  • Refining oil into fuels and lubricants
  • Producing petrochemicals
  • Liquefying gas by cooling (LNG)
  • Converting gas to liquid products (GTL)
  • Upgrading bitumen
  • Producing biofuels
  • Generating power

4. Transport and Trading

  • Shipping and Trading
  • Regasifying (LNG)
  • Supply and distribution

5. Sales

  •  Retail
  •  B2B

Strategic themes

Strategic themes

Shell manages its portfolio around 7 strategic themes, which are segmented into cash engines, growth priorities and future opportunities.

Icons of the strategic themes convention oil + gas, integrated gas, oil sands minding and oil products

Cash engines

We consider conventional oil and gas, Integrated Gas and Oil Products as cash engines. These are the activities that we expect to provide strong and stable returns and strong and stable free cash flow, and that should cover the dividends we pay to shareholders well into the next decade.

We continue to invest in selective growth opportunities in these areas.


Strategic theme icons of deep water and chemicals

Growth priorities

Deep-water oil and gas and Chemicals are Shell’s growth priorities. They should become the cash engines in the next decade, with expected improved returns and cash flow from around 2020 as growth investment flows through into production. We are developing deep-water fields in Brazil and the Gulf of Mexico, and Chemicals projects on the US Gulf Coast, Pennsylvania and in China.

Strategic theme icons of shales and new energies

Future opportunities

Finally, we see shale oil and gas and new energies as our future opportunities. We expect these to become significant growth areas for Shell after 2020. Today, our investment here is relatively low, as we focus on our current positions and potential opportunities.

Our shale portfolio is centred on the USA and Argentina. In new energies, we are building our portfolio around our existing activities in low-carbon biofuels and hydrogen, and exploring investments in solar and wind energy.

Financial framework

Diagram showing our financial framework

Financial framework

Shell’s strategy, and our financial framework, are designed to manage through multi-year macro price-cycles and multi-decade investment and returns programmes.

We have to balance near-term affordability and cost trends with the fundamentally long-term nature of our industry.

The balance sheet must support the dividend and re-investment through the low point in the oil market cycle.

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Capital investment

Capital investment
$ billion 2016 2017E 2018 Strategic theme
Oil products 4 ~4 3-4 Cash engines
Conventional oil + gas 5 ~4 5-6 Cash engines
Integrated gas 4 ~5 4-5 Cash engines
Oil sands mining <1 <1 <1 Cash engines
Deep water 9 ~7 6-7 Growth priorities
Chemicals 2 ~3 3-4 Growth priorities
Shales 2 ~2 2-3 Future opportunities
New energies <1 <1 <1 Future opportunities
Total ~27 ~25 25-30 -

Excludes BG acquisition in 2016

Historical BG Capital investment is based on BG’s published 2014 Annual Report

After the completion of the divestment of Oil sands mining business, Oil sands mining is no longer a strategic theme


Download the 'capital investment' slide

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Share prices

Share price information and charts, calculators and historical share prices.

Annual Reports and publications

The 2016 Annual Report and Form 20-F, the 2016 Sustainability Report and the 2016 Investors' Handbook are available for online reading and as PDF download.