Shell has initiated a review process for some of the companies it has invested in through Shell Ventures, its corporate venture capital unit. According to close sources, the British company is considering selling part of these stakes, although it will retain the majority of its current portfolio.
The decision aligns with the new strategic focus driven by its CEO, Wael Sawan, who has made it clear that the current priority is to strengthen Shell’s position in liquefied natural gas (LNG) and in upstream exploration and production, reducing the scope of its low-emission energy projects.
Shell Ventures and its role in the energy transition
Founded in 1996, Shell Ventures has been the vehicle through which the multinational has invested in startups in sectors such as renewable energy, mobility, carbon capture, and emissions management. Initial investments typically range from $2 million to $5 million, with total commitments of up to $25 million per company.
Despite the changes, Shell does not plan to completely divest from these sectors. The review would only affect a minority of the portfolio, focusing on identifying other investors who can drive the growth of these startups.
Financial Context and Focus on Profitability
The review of the Shell Ventures portfolio comes after a challenging quarter for the company, which reported an 11% drop in its fourth-quarter profits. This is the lowest level since early 2021, in a context marked by weak crude oil prices.
Despite this, Shell has maintained its robust share buyback program, reinforcing the message to investors about its commitment to profitability and value return.
What does this move mean?
With this decision, Shell reaffirms its new roadmap: to prioritize the most profitable and scalable businesses in the short and medium term, even if it means reducing its direct exposure to innovative energy transition startups.
For the energy startup ecosystem, this review signals that major industry players may distance themselves from certain projects if they do not align with their operational priorities.
Source: Reuters