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SHELL PLC
Macroeconomic Analysis, Competitive Positioning &
Performance Assessment

Presenter Name
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COMPANY BACKGROUND

2 • Shell PLC was founded in 1907 and is headquartered in

London, operating in over 70 countries (Shell Global,
2024).

• The company’s core business segments include

Upstream (exploration), Integrated Gas (LNG),
Downstream (refining), and Renewables & Energy
Solutions.

• Shell reported strong financial performance in 2023, with

revenues reaching $381 billion (Shell, 2023).

• Net income for FY2023 stood at $28 billion, reflecting

Shell’s robust global operations and financial stability.

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PESTEL ANALYSIS
POLITICAL AND ECONOMICAL
Political Economical
• EU Carbon Neutrality Targets: The European Union’s • Oil Price Volatility: Brent crude oil prices ranged from
“Fit for 55” policy requires a 55% reduction in $72 to $94 per barrel in 2023, causing fluctuating
greenhouse gas emissions by 2030, increasing pressure revenue streams and strategic challenges in forecasting
on Shell to accelerate its energy transition strategy investment (Alonso, 2024).
(Decroix and Desmet, 2024). • High Inflation Impact: Global inflation peaked at 6.4%
• Windfall Tax Implementation: In response to record oil in 2023, raising operational and capital expenditure
1 and gas profits, the UK introduced a 35% windfall tax on costs, particularly in large infrastructure and drilling
energy companies, reducing Shell’s post-tax earnings in projects (IMF, 2024).
the UK region. • Interest Rate Hikes: Successive rate hikes by central
• Sanctions and Withdrawal from Russia: Following the banks in major markets increased Shell’s borrowing
Russia-Ukraine conflict, Shell excited joint ventures in costs and affected shareholder returns, with a
Russia, leading to a $3.9 billion write-down in 2022 and tightening credit environment impacting future CapEx
continued limitations on asset deployment in key plans.
markets (Shell, 2022).

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PESTEL ANALYSIS
SOCIAL AND TECHNOLOGICAL
Social Technological
• Public Pressure for Net-Zero Commitments: Growing • Expansion of EV Charging Infrastructure: Shell
public and investor demand for climate action is currently operates 57,000 EV charging points
driving Shell to enhance transparency and accelerate worldwide, with plans to scale to 200,000 by 2030 to
decarbonization targets. remain competitive in low-carbon mobility.
• Shift in Consumer Behavior: Increasing preference for • Investments in Hydrogen Technology: Shell has
electric vehicles and alternative energy sources is committed over $1 billion to green hydrogen
reducing long-term fossil fuel demand projections, production facilities, including major projects in the
impacting Shell’s product portfolio strategy. Netherlands and China.
• Carbon Capture and Storage (CCS) Leadership: Shell
• Workforce Transition Challenges: Reskilling of operates one of the largest CCS facilities (Quest,
employees for renewables and digital energy solutions Canada), with cumulative storage of 9 million tonnes
presents internal HR challenges, with over 10,000 of CO₂ since start of operations (Shell, 2020).
employees involved in energy transition projects.

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PESTEL ANALYSIS
ENVIRONMENTAL AND LEGAL
Environmental Legal
• Net Zero by 2050 Roadmap: Shell targets 20% • Dutch Court Ruling: The 2021 ruling mandates Shell to
reduction in Scope 1 and 2 emissions by 2030, cut emissions by 45% by 2030 (compared to 2019
investing in nature-based solutions and renewable levels); non-compliance could lead to legal penalties
energy portfolios (And and Gorini, 2021). (Shell, 2023).
• Risk of Environmental Disasters: Oil spills and gas • Environmental Litigation Exposure: Shell faces over
leaks, such as the 2022 Nigeria incident, result in 15 ongoing environmental lawsuits globally, including
reputational damage and multi-million dollar cleanup those from NGOs and shareholder activists.
costs.
• Regulatory Pressure on Greenwashing: Shell must
• Increased ESG Scrutiny: Shell’s ESG ratings impact comply with new anti-greenwashing regulations that
shareholder sentiment; recent downgrades prompt tighten the definition of what constitutes sustainable
accelerated reporting and governance reforms. investment claims.

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SUMMARY OF PESTEL ANALYSIS

• EU Carbon Neutrality Targets and Legal Pressures: Shell must
prioritize emissions reductions due to strict EU mandates and
court rulings, directly impacting its long-term operational
strategy.

• Oil Price Volatility and Inflation: Revenue stability depends on

managing commodity price swings and rising operational costs,
making financial resilience critical.

• Growing Consumer Shift to Clean Energy: Changing consumer

behavior and ESG investor demands require Shell to accelerate
renewables investment and brand repositioning.

• Technological Leadership in CCS and Hydrogen: Shell’s

competitive advantage will rely on scaling carbon capture and
hydrogen technology to meet decarbonization goals and industry
leadership (Egbumokei and Pub, 2025).
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PORTER'S 5 FORCES

• Accelerate diversification into renewables to

defend against substitute threats.
• Strengthen supplier partnerships to reduce
exposure to rising oilfield costs (Oke, Osobajo and
Taylor, 2024).
• Leverage scale and brand reputation to stay ahead
in competitive markets, particularly LNG and
hydrogen.

Figure: Porter's Five Forces; Source: (Author)

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SWOT ANALYSIS

• Increase renewable CapEx allocation beyond

current 13% to reduce dependency on fossil fuels.
• Expand hydrogen and carbon capture investments
to secure early-mover advantage in emerging
energy sectors (Urbasos, 2023).
• Develop stronger legal and compliance
frameworks to mitigate risks from climate-related
lawsuits.

Figure: SWOT Analysis; Source: (Author)

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COMPETITOR IDENTIFICATION – BP VS. SHELL

• Shell outperforms BP in both revenue ($381B) and
CATEGORY SHELL PLC BP PLC
net income ($28B), demonstrating stronger overall
financial scale and profitability (Shell, 2023).
2023 Revenue $381 billion $248 billion
• BP invests a slightly higher percentage of its CapEx
(15%) into renewables compared to Shell’s 13%, Net Income $28 billion $13.8 billion
reflecting BP’s more aggressive energy transition (2023)
approach.
CapEx in $5 billion (13% of $4.9 billion (15% of
• Shell’s higher Scope 1 & 2 emissions (55 million Renewables total CapEx) total CapEx)
tonnes CO2) indicate greater operational scale but
also larger decarbonization challenges compared
Scope 1&2 55 million tonnes 38 million tonnes
to BP’s 38 million tonnes (Shell, 2023). Emissions CO2 (2023) CO2 (2023)

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OPERATING PERFORMANCE

• Shell’s revenue remained consistently higher than BP’s, reaching

$381 billion in 2023 vs. BP’s $248 billion (Aizarani, 2023).
• Shell generated strong operating cash flow of $60 billion in 2023,
supporting large-scale investments and record $23 billion share
buybacks (Shell, 2023).
• Shell’s net income of $28 billion in 2023 significantly
outperformed BP’s $13.8 billion, reflecting stronger profitability.
• BP leads in renewable CapEx percentage (30%), while Shell
allocated $5 billion (22%) to renewables, focusing more on LNG
and upstream (Shell, 2023).

• Shell continues to reduce net debt and leverage its diversified

portfolio for financial stability, while BP pursues faster clean
energy transition. Figure: Revenue of Shell from 2010 to 2023; Source: (Aizarani,
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TRENDS AND
OBSERVATIONS
• Shell consistently outperforms BP in revenue and net income, with a
$28 billion profit in 2023 versus BP’s $13.8 billion (Shell, 2023).
• BP is more aggressive in renewable energy spending, dedicating 30%
of its 2023 CapEx to low-carbon projects, compared to Shell’s 22%.
• Shell holds a stronger position in global LNG markets, operating one
of the world’s largest portfolios and over 70 million tonnes of LNG
sales annually (Shell, 2023).
• BP is leading in divestment from oil and gas assets, having exited
several upstream projects to accelerate its net-zero strategy.

• Shell maintains higher shareholder returns and financial resilience,

while BP’s strategy is more focused on rapid transformation despite
short-term profit trade-offs.

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CONCLUSION
• Shell demonstrates strong financial resilience, global
diversification, and market leadership in LNG production
and trading.
3 • However, Shell remains heavily reliant on fossil fuels,
with 80% of revenue still tied to oil and gas operations.
• Compared to BP, Shell is stronger in scale and
profitability, but BP is advancing faster in renewable
energy investment and asset transition.
• It is recommended that Shell accelerate renewable
investments, increase the proportion of green CapEx,
and diversify more rapidly to mitigate long-term
regulatory and climate litigation risks.

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BIBLIOGRAPHY
Aizarani, J. (2023) Shell revenue 2021, Statista. www.statista.com. Available at: https://www.statista.com/statistics/268734/revenue-of-shell/.

Alonso, M. (2024) ‘Contributions to the Analysis and Forecasting of Oil Prices’, Comillas.edu [Preprint]. Available at: http://hdl.handle.net/11531/95752.

And, E. and Gorini, R. (2021) INTERNATIONAL OIL COMPANIES AND THE ENERGY TRANSITION. Available at: https://www.apren.pt/contents/publicationsothers/irena-oil-companies-energy-transition-2021.pdf.

Decroix, J. and Desmet, C. (2024) How could technological innovations play a role in bridging the energy production gap between carbon-neutral energy capabilities and rising energy demand under the European Green Deal’s
net-zero 2050 target, Uclouvain.be. Available at: https://dial.uclouvain.be/downloader/downloader.php?pid=thesis%3A45820&datastream=PDF_01&cover=cover-mem.

Egbumokei, P.I. and Pub, A. (2025) ‘Sustainable business strategies for decarbonizing the oil and gas industry: A roadmap to net-zero emissions’, International Journal of Multidisciplinary Research and Growth Evaluation, 05(05), pp.
1014–1028. Available at: https://www.researchgate.net/profile/Anfo-Pub-2/publication/388066616_Sustainable_business_strategies_for_decarbonizing_the_oil_and_gas_industry_A_roadmap_to_net-zero_emissions/.

IMF (2024) World Economic Outlook, International Monetary Fund. Available at: https://www.imf.org/en/publications/weo.

Oke, A., Osobajo, O.A. and Taylor, S. (2024) ‘Addressing the Trilemma of Challenges: The Need for More SC Strategic Collaborations in the UK Oil and Gas Sector’, Sustainability, 16(2), p. 570. Available at:
https://doi.org/10.3390/su16020570.

Shell (2020) Quest CCS Facility Captures And Stores Five Million Tonnes Of CO2 Ahead Of Fifth Anniversary, www.shell.ca. Available at:
https://www.shell.ca/en_ca/media/news-and-media-releases/news-releases-2020/quest-ccs-facility-captures-and-stores-five-million-tonnes.html.

Shell (2022) Our response to the war in Ukraine, Shell Sustainability Report 2022. Available at: https://reports.shell.com/sustainability-report/2022/our-core-values/our-response-to-the-war-in-ukraine.html.

Shell (2023) Shell Annual Report and Accounts 2023 - Shell plc Annual Report and Accounts 2023, Shell Annual Report and Accounts 2023. Available at: https://reports.shell.com/annual-report/2023.

Shell Global (2024) Our company history | Shell Global, www.shell.com. Available at: https://www.shell.com/who-we-are/our-history/our-company-history.html.

Urbasos, I. (2023) EU hydrogen diplomacy 2.0: aligning climate ambition and energy security. Available at:
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https://media.realinstitutoelcano.org/wp-content/uploads/2023/10/eu-hydrogen-diplomacy-2.0.-aligning-climate-ambition-and-energy-security.pdf (Accessed: 21 March 2025).
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THANK YOU

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