Royal Dutch Shell CEO Rejects Hedge Fund Third Point's Demand for Corporate Split

Ben van Beurden, CEO of Royal Dutch Shell
Photo by Reuters

[Asia Economy Reporter Park Byung-hee] Ben van Beurden, CEO of the global oil company Royal Dutch Shell, has rejected the demand from the U.S. hedge fund Third Point to split the company into fossil fuel and eco-friendly energy divisions.

In an interview with the BBC on the 3rd (local time), CEO van Beurden dismissed the split demand, stating that the eco-friendly energy business can only be funded by the profits earned from fossil fuel businesses such as oil and gas. He argued that since the eco-friendly energy sector requires large-scale investments but does not generate significant profits, the existing oil and gas business must be maintained, and therefore the company cannot be separated.

CEO van Beurden said, "The company's eco-friendly energy plans can only be realized based on funds generated from the oil and gas sector." He also emphasized, "Reducing dependence on traditional energy sources like fossil fuels must be addressed over time," adding, "Otherwise, there will be adverse effects such as price shocks."

He explained, "Currently, profits come from existing fossil fuel businesses such as oil and gas," and added, "If we build a hydrogen power plant worth $1 billion (approximately 1.2 trillion KRW) in the North Sea, it will inevitably be funded by money earned from the oil and gas business, not the hydrogen business."

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