Shell withdraws from wind farm projects, refocuses on oil and gas

Multinational energy group Shell has announced that it is pulling out of two offshore wind farm projects in the United Kingdom. Like some other oil and gas giants, Shell has been reassessing its strategy in recent years and, after previously setting ambitious plans for renewable energy development, is returning to oil and gas production.

Shell’s management has decided to abandon the MarramWind and CampionWind offshore wind farm projects following a review of its strategy. Shell has sold its 50% stake in the MarramWind project to ScottishPower Renewables, while for the CampionWind project it returned the lease rights to Crown Estate Scotland, which manages Crown land. According to Reuters, it is not yet clear whether the CampionWind project will continue in another form. Together, the two projects were expected to offer around 5 GW of installed capacity.

The decision to end its involvement in these offshore wind farm projects is linked to the company’s change of strategy, which involves lower spending and, conversely, a gradual increase in the funds allocated to dividend payments. The company also plans to expand its activities in the liquefied natural gas (LNG) market, where it expects significant growth.

“Following a comprehensive review and in line with Shell’s previously announced shift in energy strategy towards leveraging its strengths in trading and retail, the decision was made not to proceed with the CampionWind project,” a Shell spokesperson said.

Shell is far from the first oil and gas giant to have reassessed its strategy recently. The British company BP has also announced a return to higher investment in oil and gas production at the expense of renewable energy development. Similar moves are being made by France’s TotalEnergies, for example, which has increased gas production since the start of the year and is focusing more on the profitability of its refineries.

Wind is not the only sector facing headwinds; biofuels are too

Shell’s investment cuts and scaling back of activities are not limited to offshore wind farm projects. The company had previously announced, for example, that it would end its project to build a biofuel production facility in Rotterdam, the Netherlands.

The company put the project on hold last summer, but following a further technical and economic assessment, it will shut it down completely. Although the EU plans to use more biofuels in the future, demand is currently limited, while imports from third countries are putting further downward pressure on prices.