2017 was quite a year. When you look back on it, what brings a smile to your lips and what gives you pause for thought and reflection?

It was a good year for us. Our quarterly results had strong momentum, showing our strategy is working. We were under pressure in 2016 on that front so delivering those results felt good.

Then there was Prelude, our floating facility that will produce and process liquefied natural gas at sea. What a momentous engineering event! It was quite a sight to see that hull leave the shipyard in South Korea and then being anchored in Australia.

And the way the people of this company responded to Hurricane Harvey was incredibly humbling. Such resilience, courage and humanity. It made me proud to work for Shell.

On the other side were the safety issues we had in the year. A contractor died in a road accident in Alberta and we had a non-industrial fatality in Port Harcourt. Every death is one too many. It is something we have to reflect deeply on.

More broadly, the safety performance at our facilities has not been good enough and that gives me concern. We have to redouble our focus and continue to bring the number of incidents down.

And the tanker lorry tragedy in Pakistan was just terrible. It is a stark reminder for all of us that we must never forget the role that safety plays every day.

Shell has three strategic aims. Top of the list is becoming a world-class investment case. Is the company nearly there yet?

If you look back on how we have been doing, in terms of total shareholder return, you could argue we are already number one in the industry. Now we need to sustain that… for three years, 10 years and beyond. Nothing in the bag yet, but I am very confident.

We also said we need to be the leading company in terms of overall value. At the moment we are number two and we are closing in on number one. We almost have the tiger by the tail.

So, yes, I feel pretty good about progress towards our world-class investment case.

Time to relax then?

No, I’m afraid not. And I don’t say that because I have to… I believe it.

I do not think that everything is where it needs to be.

In fact, we have much to do. I have already mentioned that we need to do better on safety and we need to do better on the financials too.

In the third quarter, we made around a 5% return on capital employed – the amount of profit made from our capital investments. That is not good – we need to get to double digit returns. We need to continue to bring debt down.

And although costs have come down, there are still potential cost savings out there. We have picked the low hanging fruit… but there is more to be had.

We also said we would turn off the scrip dividend – the payment of some of the dividend in shares rather than cash – and buy back some of the extra shares we have issued.

We will cancel the scrip for the fourth quarter onwards but we have not yet started buying back shares, although we have confirmed plans for buying at least $25 billion in shares between now and 2020.

The buying back of shares is, of course, subject to progress on further debt reduction and recovery in oil prices. So we still have quite a way to go.

And what does the oil price mean for this progress?

We talked about “lower for longer” and that’s what happened. But that low oil price brought the opportunity to act vigorously.

I think if oil prices had rebounded quickly, many of the improvements we are now celebrating would not have come about. Under pressure you find resourcefulness, imagination and new solutions.

We responded very well to “lower for longer”. Now we have to act as if it’s going to be lower forever. That’s not so much about long-term plans for the company, but more that we need to maintain the mindset that each of our projects should be resilient even at times when the oil price is low.

The second of Shell’s strategic aims is to thrive through the energy transition. How is Shell moving with the times here?

Thriving through the energy transition is one of the key things we need to get right. The energy transition is becoming a mainstream issue for the general public, for our shareholders and within the company.

This is not just a matter of survival. It’s about turning it into a major opportunity for us and doing the right thing as a part of society.

We have been thinking very deeply about what we need to do and also what the Paris agreement on climate change really means for a company like ours.

We believe we have to reduce the net carbon footprint of the products and solutions that we put into society. This needs to be in line with the global effort to meet the Paris goal: restricting global warming to under 2° Celsius.

That means that Shell has to do a number of things. We have to make our plants more efficient but that is not going to be enough.

We have to look at how we bring more biofuels, hydrogen and electric vehicle charging into the mix. More renewable power too. We must also look at how we develop and deploy carbon capture and storage and work with nature to compensate for emissions that are still in the system.

All of this is already happening but we will do more of it. It is about making sure that our products, and the footprint they have, goes with the tide of history.

Importantly, I believe Shell can achieve this without destroying value in the company. It is about identifying real business opportunities to thrive through the energy transition.

And you’re getting a hybrid car?

I have it! It is a Mercedes 500 plug in hybrid. And it’s a really nice car. I like it a lot. It covers my commute and other work travel in the Netherlands so the distances are not too far. That means it basically only uses the electric motor.

What message do you hope to send out with that choice?

The message really is that we are a company of the future. We have to embrace the future and the future will include battery electric cars. That is very clearly going to be part of our business. We cannot deny ourselves the opportunity to participate in this.

The world is changing and if our customers’ needs are changing we have to change with them. And there’s nothing wrong with that in my mind. Having a siege mentality on these things is completely inappropriate.

The era of oil and gas and petrochemicals is not over, but the era of electric transport is also coming in.

The world will need refineries for a long time to come because many parts of the transport sector will not be able to run on electricity or hydrogen, or whatever, very quickly.

Take heavy duty transport, aviation, shipping, even most trains. Some 50% of the trains in Europe run on diesel. And in the developing world especially there is no prospect of a quick shift to an electric system or a hydrogen system.

When Shell’s New Energies business was launched in 2016 the company said it could invest up to a billion dollars a year by 2020. Is this business making progress?

Essentially the New Energies strategy comes down to two main components: new fuels and power.

New fuels is actually quite close to what we are already doing: biofuels, charging, hydrogen. It follows the same sort of logic we already have in our traditional fuels business.

Power, on the other hand, is truly different. For that we have two strands.

The first is that we want to be an integrated power player.

That makes it pretty similar to what we do in oil or gas: we produce the stuff, we sell it to customers and we also have a piece in the middle where we optimise value. We need to have a similar approach in power and we have to grow that into a material business. 

The second strand is about making a material, commercially attractive, business out of providing energy to those who have insufficient access to it today. It will involve renewable power and probably natural gas as well.

Think of Africa where there are many countries where people have insufficient access to reliable, affordable and safe energy. They often pay much more for energy than we tend to pay in the western world, certainly relative to their income – so there is a business to be had there.

It’s not an easy business and it is not a charity. But if we do it well we can build a fantastic brand presence in emerging economies.

How much capital investment will be involved in New Energies? Between $1-2 billion a year on average. It will come in chunks as we acquire some businesses to grow.

There are three things that are critical to Shell’s approach in this area: humility, discipline and conviction.

Humility because, although we have some good knowledge, it is a relatively new area for us and there will be a lot of learning. Discipline because it has to make commercial sense and we do have to do that learning. And conviction because we must approach this as an opportunity.

To succeed we have to take some risk. We cannot succeed without breaking new ground.

You felt pretty optimistic after Paris. Do you feel optimistic that the world is on track to achieve its goals?

Yes, I am still optimistic. Paris is a very strong agreement. If I put my engineer’s hat on for a moment, I think restricting warming to under 2°C is both technically and economically possible. The question is more over society’s capacity to take this on.

Tackling the decarbonisation of power generation is important, but power is just one part of the energy system. Transport, buildings and industry too will have to be tackled. And not just in the developed world, but everywhere.

Increasingly, action on climate change is likely to invade people’s private space. They will have to insulate their homes and buy different goods. There may even be regulation from the governments that forces people to do things differently.

When the action necessary becomes invasive for individuals that will become a challenge for politicians because it ultimately impacts their ability to get re-elected.

Is it possible? Absolutely. But it will require a much more collaborative approach. 

And I think there is a role for the industry generally and Shell specifically to help that process: to actively help bring about solutions in coalitions of the willing.

We have talked about the world-class investment case and thriving through the energy transition. What about the third strategic aim of strengthening Shell’s societal licence to operate – the level of recognition within society that Shell is a force for good? What does this mean to you personally and how will you judge that Shell is succeeding?

You know, I very strongly identify with this company and I am sure many other employees do too. Like them, I want to belong to something good. People have chosen to work for our company because they believe in it. They believe that we are doing the right things, they believe that we have the right attitudes. 

We are not yet telling our story well enough. That is something I know more intuitively than scientifically.

We have to do three things to turn this around.

First, we have to deal with certain issues that continue to hurt our reputation. Not just manage them, but deal with them properly so that we can put them behind us.

Just one example would be Nigeria. Shell companies in Nigeria are achieving many good things in the country but there is the ongoing issue about environmental damage in areas where oil theft and illegal refining is rife and cleaning up is not a simple matter.

We have to work to find a solution to issues like these. I think we have to have a much stronger attitude of resolving them, dealing with them and putting them behind us. It is not just about managing them.

Second, help people understand our products are essential ingredients to a good quality of life. That means the right products delivered in the right way.

We must act as good product stewards. So, if we want to push natural gas, for example, we have to take action on methane leaks.

Third, we have to have a purpose that extends beyond Shell. By providing employment and paying tax, yes, but we do that anyway. This is something manifested in things like providing access to affordable energy for those who do not have it.

By making sure that we really contribute to the communities in which we operate by being a good and meaningful neighbour. Providing education, building local talent, developing enterprise. All of this.

Do you jump out of bed in the morning?

Well, I do actually! I’m a good riser… a morning person. I normally wake up somewhere between five and six with my mind telling me there is stuff to do. I wake up with new ideas, or with problems solved in my mind, or with a desire to start tackling and testing things. I have a very active mind. It is both a blessing and a curse.

And, how do you relax at the end of the day?

That’s the curse part of my active mind. I think the honest answer is I don’t relax enough.

I have a young family and that helps a lot. They need me too and that is lovely to have. It also helps keep perspective on things. 

When you finally get to sleep each day, do you dream in Dutch or English?

I dream in both. It depends on what the dream is about. I still count in Dutch though - I was told that’s the last thing that goes. It’s easier, more natural, to count in our true mother tongue.


Ben van Beurden spoke to Lech Mintowt-Czyz and Rob van’t Wel

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