Shell's vision aligns with that of PM Modi for India's energy sector, says chief executive officer Wael Sawan
Feb 23, 2024
Synopsis
In an interview with ET, Shell CEO Wael Sawan expressed concerns about rising political and social polarization worldwide, citing its impact on policy stability and investment risks in the energy sector. He emphasized that Shell's energy transition trajectory will be driven by economics, regardless of political changes, although policy shifts can affect investor confidence.
Rising political and social polarisation across the world is a real concern as it brings policy instability and raises risks for investments in the energy sector, Shell chief executive officer Wael Sawan told ET's Sanjeev Choudhary in an interview. The trajectory of the energy transition will be driven by economics and may not change even if Donald Trump returns to the White House, though a policy change can lower investor confidence, said the 49-year-old Lebanon-born CEO. Shell's vision aligns with Prime Minister Narendra Modi's for the energy sector, and India will have a growing role in the company's future portfolio, he said. Shell aims to use India for strategic sourcing to enable energy transition in Europe and the US, Sawan said. Edited Excerpts:
You were born in Lebanon and grew up in UAE and went to Canada and the US for higher studies.You lead one ofthe largest Western firms in the world today. What would be your advice to those seeking similar success?
Sometimes I feel that maybe the cards were stacked against me, but that just made me hungrier. The worst thing is when you start to explain to yourself why you cannot do something. Liberate your mind to be able to actually embrace the opportunities that are out there. The world changes. Life will give you opportunities. But be ready when the opportunities come.
You have plenty oftime ahead of you. Whatis the kind oflegacy you would like to leave behind?
The legacy I believe in is that of talent and capability because I think the energy transition is going to take different directions in different countries. And so, my biggest opportunity is how we continue to evolve and transform the culture of this company.
Whatis your India strategy?
With all my travels to India over the last 25 years, I don't think I've seen this exciting of a time before. I think there is real confidence, real clarity of ambition, and clarity of intent. And I think Prime Minister Modi's vision of the future of the country again is one that now very much aligns with where we would like to go as a company: the balance of energy security and energy transition.Today, we have over 13,000 staff in India, making it the largest population of Shell in any one country. And that we are leveraging across in technology, in engineering, in AI, in everything.
Why do you think foreign majors haven't shown much interestin the Indian upstream?
If we're going to go into a new (upstream) market, it has to be material. It has to be big. It has to be over 100,000 barrels per day of production. I think we are very focused on gas value chain investments.
What are the biggest geopolitical risks for the oil and gas market and Shell?
What we see is more and more polarisation...political polarisation and social polarisation. That is a concern for us because a lot of the energy system has been built on globalisation. At a time when the energy transition requires everyone to step in and support each other when you have changing trade flows, that creates a real concern. When we think about our plans, we have uncertainty and volatility at the centre of every decision we take because we see that the risks are only growing for various reasons - geopolitics and economic bifurcation.
What do you mean by social polarisation and how does it affectthe energy sector?
This year, of course, is a very, very big year in elections around multiple countries. As you see this swing between extreme right and extreme left, it means policies shift depending on what government is in power. The danger right now is you have to start, stop, start, stop. And that is very disruptive as you are investing in long-term returns.The energy transition requires sometimes 10 years of stability to be able to actually just achieve a return on your investment. And so, if you don't have significant confidence in the stability of those policies, that undermines the investment thesis.
As appeared in The Economic Times