Shell (LON: SHEL) could cut its oil and gas exploration workforce by 20%, a new Reuters report has warned.
Citing company sources, the news agency said that the cuts would hit workers in Shell’s oil and gas exploration, well development and subsurface units.
They said that the restructuring could see hundreds of job cuts around the world, with some in the UK, but mostly at the company’s offices in Houston and The Hague.
The sources added that the cuts will be subject to consultations with employee representative bodies.
Reuters contacted a Shell spokesperson who did not comment on the reduction figures, but stated: “Shell aims to create more value with less emissions by focusing on performance, discipline and simplification across the business. That includes delivering structural operating cost reductions of $2-3 billion by the end of 2025.”
Shell’s upstream division accounted for over a third of the company’s $28.25 billion in adjusted earnings in 2023, Reuters said.
The move comes as Shell CEO Wael Sawan aims to drive savings at the profitable division as the group moves back to its core business and away from its forays into renewables and clean energy.
Shell was also hit with uncertainty over its major Jackdaw project as the UK government said it would not challenge a judicial review of the project.
Greenpeace and Uplift brought a legal challenge against the approval of both Jackdaw and Equinor’s Rosebank.
With the government declining to step in, the future of the projects will be decided by the review – though the ongoing review means the licences have not been withdrawn.
Shell’s shareholders approved a new energy transition plan this year with weaker carbon-emissions targets as it rejected resolutions to align itself with the goals of the Paris Climate Agreement.
The London-based major now aims to reduce its net carbon intensity by 15% to 20% by 2030, compared with a previous target of 20%.
Industry sources have previously said that Shell is looking to cut the workforce from its offshore wind business, with layoffs likely to affect workers in Europe.
Rumours have also pointed to the company planning to sell leases it won to develop floating wind farms off the coast of Scotland.
This would see Shell sell its share of projects in a joint venture with Scottish Power to develop as much as 5GW of floating wind farms.
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