Shell Hits Record as New CEO Makes Most of High Oil Prices

(Bloomberg) -- Shell Plc shares hit a record high as rising energy prices and the new CEO’s stronger focus on the core oil and gas business attracted investors.

Shares of the company rose as high as 2,763 pence in London on Monday, marking a threefold increase from the pandemic-era low of 878.3 pence three years ago.

The price recovery follows a series of strategic pivots by Shell under different leaders. As oil and gas prices collapsed during the lockdowns of the Covid-19 pandemic, then-Chief Executive Officer Ben van Beurden slashed the company’s dividend by two thirds, accelerated its shift to cleaner forms of energy and pledged to hit net zero greenhouse gas emissions by 2050. 

Van Beurden’s successor in the top job, Wael Sawan, has maintained the mid-century carbon target but is directing a greater proportion of the company’s investment into oil and gas. He is seeking to win over investors with higher returns stemming from a “ruthless” focus on performance and financial discipline.

The rally in Shell shares has been driven by higher commodity prices, particularly for natural gas in Europe, “and the strategic changes announced by the new CEO in June, which is likely drawing in more investors,” said Morningstar analyst Allen Good. 

However, Good points to “currency issues” as also being part of Shell’s rise. “US dollar-based shares remain below their highs, so part of the move is lower pound and euro.”

(Updates with analyst comments from fourth paragraph.)

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