- By Joanna Partridge: ITV News Business Producer
In 2009, with the oil price sitting at around $50 a barrel, oil firm Shell decided some renewable energies didn’t make economic sense. The bosses at the time decided to stop investing in renewables like wind, solar and hydro power, focusing instead on biofuels alongside its core oil and gas business.
Seven years later, after extreme fluctuations, the oil price is once again back floating around $50 a barrel. But Shell has changed its mind about renewables and how it will make money in future, in a world after the Paris COP 21 climate change deal.
The Chief Executive Ben van Beurden concedes the previous team may have got it wrong in the past - at least on wind power.
“We were significantly invested in solar, which didn't work out for us, we were basically not able to make money, as many others, in producing solar panels so we got out of that business by and large," he said.
"As a matter of fact we continue to invest quite heavily in biofuels, which is a renewable as well … but I would say our return into wind is a bit of a u-turn, and if I have regrets it's that we went out of wind when we did."
Today, Mr van Beurden is outlining his strategy for the business to investors, which he says is about “transforming the company financially”, following Shell's £40 billion takeover of its smaller rival BG earlier this year.
With a continued lower oil price, Shell continues to look to cut costs and jobs. It’s on track to cut 5,000 jobs following its merger with BG and is aiming to shed 12,500 jobs by the end of this year from a workforce of almost 95,000.
Drilling in the Arctic has always been a controversial – and costly – enterprise. Shell decided to abandon drilling in the Alaskan Arctic in September last year. And it follows it course of belt-tightening, it has no plans to return to the icy Chukchi Sea: “we have said that's it, we are out of Alaska for the foreseeable future.”
The older oil fields of the North Sea are also an expensive place to do business. A total of 475 people working in and around Aberdeen were laid off in May. Across the wider industry there's warning of more possible pay cuts and job losses to come, and van Beurden couldn’t promise the Shell job losses were over.
“Is that it? Well, I do think we have improved tremendously the financial position of the business that was seriously challenged financially, I think they are in a much better place. Let's see where we get toin terms of oil price recovery,” he said.
As the era of lower oil prices continues, that offers little consolation for the 1700 people still working for Shell in the North East of Scotland, in and around the Granite City.