Shell as a long term investment strategy

[richfool]

The big problem for Shell and other oillies is that Saudia Arabia's total cost per barrel is only about $9 whilst their cost is many times that.

If MBS accepts that oil is going to be unsellable in 20 or 30 years time, it makes sense for SA to lower the price to a level that is unworkable for the western oil producers (eg $20 - $25) and grab the whole market for himself.

If that is his plan, the Shell divi is not going to survive for long.

Good call! It survived fro six weeks in fact!

Mind you I still think that Shell is a good long term share, especially if we consider the current situation is hopefully likely as bad as it gets for Shell (ridiculously low oil price and Covid 19) It may well hold its current dividend for some time but it will rise again. I am not selling.

Dod

(My bolding above)....Or at least until alternative sources of energy take over (replace oil), which I would think will happen before oil stocks in the ground run out. The question I would be asking is if Shell will have moved into those alternative energy sources sufficiently and in time. I note they are dabbling in renewable energy.

[Dod101]

Good call! It survived fro six weeks in fact!

Mind you I still think that Shell is a good long term share, especially if we consider the current situation is hopefully likely as bad as it gets for Shell (ridiculously low oil price and Covid 19) It may well hold its current dividend for some time but it will rise again. I am not selling.

Dod

(My bolding above)....Or at least until alternative sources of energy take over (replace oil), which I would think will happen before oil stocks in the ground run out. The question I would be asking is if Shell will have moved into those alternative energy sources sufficiently and in time. I note they are dabbling in renewable energy.[/quote]

One of the consequences of holding my Shell share in an ISA nowadays is that I do not get a printed Annual Report unless I ask for it. I know it is available online but I find that much more difficult to read so I cannot say but I got the impression that Shell is doing a bit more than 'dabbling' in renewables but I must research that.

Dod

[flyer61]

Having sold all my BP and Shell the day before the Shell results it has given me time to reflect on my reasoning. The Companies I want to be in don't 'magic' dividends out of thin air. They have a long term sustainable business model and sensible people to achieve this. To that end the board of RDSB get my respect for grasping the nettle and not letting history, inertia or whatever colour their judgement.

RDSB is a Company that most certainly should not be written off in fact it deserves diligent watching for a re entry. I agree with RVF the gas story seems a sensible long term plan.

[Lanark]

Based on this article
https://www.wired.com/story/the-world-i ... needs-why/

It seems a shutdown of production will hit shale production much harder than conventional oil, it affects the long term well capacity.

I think that Shell may have more exposure to Shale oil than the other majors, but I could be wrong about that?

[AsleepInYorkshire]

I have long term fears with RDSB, which I don't want to get at all political about, but because I see future horizons where oil+gas extraction reduces globally due to ongoing climate/green-energy issues. Just look at the trends in electric cars, wind and solar power etc.

Matt

Solar Can Make Carbon Neutral Aircraft Fuel from CO2 + H2O

Shell Global Solutions in Amsterdam refined the thermal solar syngas into jet fuel, using the Fischer-Tropsch method.

AiYn'U

[OwenSwansea]

I do not see electric cars as being very practical. Hydrogen power makes more sense, and I hope that Shell are investigating this possibility.
Hydrogen could be produced using inexpensive solar power from vast sites in the desert regions of the world.

Owen.

[johnhemming]

In the end the second law of thermodynamics is called a law because it is always followed (moreso than societal laws). I have heard reports of conversion ratios of 30% from solar radiation into electricity recently. However, that will probably be a limit.

Hence although I think some progress will be made in terms of moving towards renewables, there will be demand on fossil fuels until geological constraints hold back production.

[monabri]

I do not see electric cars as being very practical. Hydrogen power makes more sense, and I hope that Shell are investigating this possibility.
Hydrogen could be produced using inexpensive solar power from vast sites in the desert regions of the world.

Owen.

Absolutely...and there's plenty of hydrogen around!

[OwenSwansea]

I understand that Shell have a substantial investment in The US shale oil industry, which is a problem. However, I still expect that President Trump will impose a tariff on oil imports into the US in order to save the frackers from bankruptcy and avoid even more unemployment, but he will not do this until after the Presidential Election, as the cost of this action will be to double gasoline prices in the US.
In addition, oil will still be required to produce plastics, and many other products which are essential to modern life. The oil industry is be no means dead yet.

Owen.

[johnhemming]

The timescales for these things are shorter than the US Election.

[johnhemming]

Absolutely...and there's plenty of hydrogen around!

Just dip into the Sun and there is lots

[monabri]

I'd say that there is so much uncertainty in oil requirements over the next 20 years. One scenario indicates a sustained increase in oil demand and another shows a reduction, predecated by increasing use of electric
vehicles.

"In the Stated Policies Scenario, demand growth is robust to 2025, but growth slows to a crawl thereafter and demand reaches 106 mb/d in 2040. In the Sustainable Development Scenario, the unprecedented scale, scope and speed of changes in the energy landscape paints a very different picture: demand soon peaks and drops to under 67 mb/d in 2040.

https://www.iea.org/reports/world-energ ... k-2019/oil

What will be the true picture? ...we will know in 20 years time. I'm guessing somewhere in between the two possible le outcomes but with a bias towards the higher oil demand scenario.

[OwenSwansea]

I would hope that a way could be found to keep the US shale oil industry on life support for six or seven months until an import tariff is imposed. I think that the Americans would not want to lose their important self sufficiency in oil production.

Owen.

[TheMotorcycleBoy]

I have long term fears with RDSB, which I don't want to get at all political about, but because I see future horizons where oil+gas extraction reduces globally due to ongoing climate/green-energy issues. Just look at the trends in electric cars, wind and solar power etc.

Matt

Solar Can Make Carbon Neutral Aircraft Fuel from CO2 + H2O

Shell Global Solutions in Amsterdam refined the thermal solar syngas into jet fuel, using the Fischer-Tropsch method.

AiYn'U

Aviation: Indeed non-petro fuels are already possible. Even our petrol engined cars today run on 5% ethanol. Ethanol can be made by fermentation. It's not unreasonable to assume an evolution in commercial aero engines to use ethanol or hydrogen as their fuel is it?

I do not see electric cars as being very practical. Hydrogen power makes more sense, and I hope that Shell are investigating this possibility.
Hydrogen could be produced using inexpensive solar power from vast sites in the desert regions of the world.

Owen.

Of course hydrogen has energy potential. It's not without safety concerns however, though perhaps engineering will still save the day. But my view is that the cash-strapped/debt-laden oilies will not be in any position to make any money on hydrogen (or any other renewable tech). Other younger, more dynamic firms, will get there first.

Matt

[Dod101]

Others know a lot more about this subject than me, which would not be difficult but Shell is, I am sure, well aware as well so I am prepared to put my faith in Shell for the future. I have ordered a hard copy of their Annual Report because I find trying to read it online quite difficult They are very much into climate change and energy in general and not just oil and gas so I will hang in there and they even bring the bonus of a small dividend!

I also like their culture.

Dod

[Wizard]

Others know a lot more about this subject than me, which would not be difficult but Shell is, I am sure, well aware as well so I am prepared to put my faith in Shell for the future. I have ordered a hard copy of their Annual Report because I find trying to read it online quite difficult They are very much into climate change and energy in general and not just oil and gas so I will hang in there and they even bring the bonus of a small dividend!

I also like their culture.

Dod

I did some consulting work for Shell many years ago. One aspect of their culture I found interesting is that (at that time at least) they assessed everyone that joined the company and assigned them with the maximum level they would reach in the company. I remember speaking to one of their senior people who told me it proved incredibly accurate. He looked rather blank when I said it may be a self fulfilling prophesy. I pointed out one of the people on the project who I knew had been given a very high ceiling grade, the Committee of Managing Director (which was the most senior four or five people in the business). The people they worked for knew this, as a result they were given all the most interesting roles and everyone was really helpful to her as they expected that one day they would be working for her. He dismissed this and said that it was just a really good system that got the answer right pretty much every time.

No idea if this is still done these days.

[ADrunkenMarcus]

I'd prefer Unilever to Shell as another Anglo-Dutch company.

Best wishes,

Mark.

[Dod101]

I'd prefer Unilever to Shell as another Anglo-Dutch company.

Best wishes,

Mark.

I hold both and find the balance of cultures very interesting and I think helpful. Where it can go wrong was when in the case of Unilever they had a Dutchman as Chairman and another Dutchman as CEO. That lead to the attempted Dutch takeaway which as we all know failed abysmally.

Dod

[Wizard]

I'd prefer Unilever to Shell as another Anglo-Dutch company.

Best wishes,

Mark.

I hold both and find the balance of cultures very interesting and I think helpful. Where it can go wrong was when in the case of Unilever they had a Dutchman as Chairman and another Dutchman as CEO. That lead to the attempted Dutch takeaway which as we all know failed abysmally.

Dod

Don't forget the ex-Unilever Dutch PM in all that!

[bluedonkey]

Before the current market rout, I was planning on making one of my infrequent tinkers. This was to sell BP as part of a long-term plan to wind down my oil investments (what I was going switch into is OT). I suppose I could still do that, the market has dropped generally, so switching has no higher cost now than previously.

Just my musings.