The US unit of Royal Dutch Shell Plc may soon drop the word “oil” from its name in a move that would symbolize its transition to other sources of energy, an executive said.
With Shell Oil Co.’s parent focusing more on natural gas and looking at other energy alternatives, the oil in the name “is a little old-fashioned, I’d say, and at one point we’ll probably do something about that,” Marvin Odum, director of the company’s upstream Americas business, said Thursday at the Toronto Global Forum.
“The increasing returns and the profile of some of the renewable-energy companies is absolutely true,” Odum said in an interview with Matthew Winkler, editor-in-chief emeritus of Bloomberg News. “The good news about that is it’s a clear signal that the transition is actually here.”
The Anglo-Dutch parent, Europe’s biggest oil company, began producing more natural gas than oil two years ago, a trend that has continued, Odum said. With the $70billion acquisition of BG Group Plc, the company would become the world’s largest non- state gas producer.
Conversations among Shell’s leaders have changed rapidly in the past 10 years to focus more on the business implications of alternative sources of energy, Odum said.
“Climate change is real,” he said. “We spend a fair amount of time as an executive committee, as a board actually, looking at what that wider swath of investment opportunities out there are, including the alternative and renewable options.”
Even though wind and solar energy companies are beginning to be profitable, it will take a long time before alternatives make oil and gas irrelevant, Odum said. The pace of change in the energy industry is slow, and it could take decades for new technologies to carve out a sizable chunk of the world’s energy system, he said.