News and Press
Palissy Questions Shell’s Ben Van Beurden on ESG Strategy
Transcript: [From 24 Mins Onwards]
Anish Kapadia from Palissy Advisors. One of the things that stood out from the presentation, it's an ESG presentation, but is very intensive -- energy intensive in terms of emissions. And there's a whole spectrum of ESG. And one of the issues I wanted to focus on is looking at things actually from the other side though, you look at the industry, the lack of investment has gone into oil and gas over the last 5 years or so, the cutbacks in CapEx. It's one of the reasons behind the very high prices you're seeing in terms of oil and gas at the moment. And it's creating problems all around the world in terms of energy poverty.
You're seeing it even in the developed countries. But you've got people in the developing countries that have got to make a choice between switching away from actually dirtier fuels to cleaner fuels and you've got the economic consequences as well. So my question really is, how much are you thinking about the consequences of your actions of not investing enough in energy when we're clearly going to need a lot of fossil fuels over the coming decades.
Ben Van Beurden
Yes, it's a good question. It's very topical. Let me start and then see whether my colleagues want to add to it. I think, first of all, you're absolutely right. It -- there is a significant reduction in investment in oil and gas in the last few years. As a matter of fact, when I was speaking with Fatih Birol some time ago, and we talked about the IEA net-zero emissions scenario that came out a year ago. We both sort of said, well, a year on with this strategy or this scenario, we are roughly 2.5 years behind already because we have been traveling in the opposite direction. And as a matter of fact, the only thing that we agreed on was on track with the IEA net-zero scenario was the investment levels in oil and gas. And that's exactly the problem.
So the industry in terms of investing has done its piece, not necessarily because we took serious note of the scenario, but simply also because of the pandemic, because of all sorts of other pressures where we felt cash preservation and the direction the company needs to bring us to another place. I would imagine it will take some time for people to step up again investment in oil and gas. But it doesn't mean, by the way, that we are investing less in energy. We're just investing in different energy. So if I want to look at provision of secure, affordable and reliable energy in India, I'd much rather see what we can do with solar rather than to see can we bring more kerosene and diesel to India, and/or can we invest in the upstream, Wouldn't that be a great idea. So I think altogether, our investment levels on energy as such, are still intact. It's just that the portfolio is changing quite significantly.
But we need to make sure that, indeed, all that investment that we direct to these newer energy forms is also relatively evenly spread around the world. If we want to talk about reducing fuel poverty or energy poverty, not just in Northwest Europe, but also in the Africa and other parts of the world, we better make sure that some of our strategy very clearly focuses on investing in these areas as well. But I'd like to content that we are still investing as much in energy as before. It's just a different form. And I believe it is also a form that is strategically more advantaged in the future.
Most of you have now been long term subscribers to Palissy’s research product. You know we share a vision that commodity and equity research should be different from the classic research bank model. More simply put, we believe that all research should be actionable.
Today, we’re excited to share how we’re accelerating and further realising that vision with Aurélien Bonneviot joining as Head of Mining and Metals.
He brings us his research and investment backgrounds both on mining commodities and commodity sector equities. Aurélien started as a mining equity analyst with Socgen and Oddo and moved to a fund manager position where he was helping to manage €19bn at SMA Gestion in Paris, running both commodity and commodity equity funds for 4 years. He then joined Louis Dreyfus Metals’ Trading Investment team for 5 years where he was managing transactions between junior mining companies, producers, shippers and smelters across the globe. He was most recently a Senior investment Manager for Greenstone Resources, a $500m private equity fund investing in listed mining companies based in London.
Aurelien and I have been exchanging our views of the market for over 10 years now and I am excited to be able to include his input and knowledge to the research product. Having worked for one of the largest physical trader and junior mining companies, he has a deep understanding of the mining sector from exploration to production. Throughout his career he has lead technical and financial due diligence site visits around the globe with mining experts (mining engineers, geologists, metallurgists) which gives him a “boots on the ground” approach to the sector and a strong understanding of the risks and opportunities. Aurelien has also managed capital and is intimately convinced that research should be high quality and more importantly, actionable. He is a well-known and respected analyst by senior management at the largest diversified mining companies and I see his arrival as a great validation of our mining differentiated independent research business model. I believe Aurelien will lead our mining practice successfully and that this, is an important milestone for Palissy Advisors.
Anish Kapadia and everyone at Palissy are joining me to express our deepest appreciation to our clients, who have entrusted us to help them optimise their investments in these ultra-cyclical sectors both on the commodity and equity side. As ever, we are totally committed to you and focussed on enabling your success.
US oil futures drop below $0 for the first time
APR 2020 - REUTERS
2020 high conviction themes across energy, metals, mining and renewables equities.
Topics included: Oil Integrated and ESG flows, IMO regulation and effects on downstream margins, energy capex forecasts outside of the US with a deep dive on LNG, US onshore capex outlook, new trends in 2020 for China construction markets and their impact on mining commodities.
Macro discussion focused on the non-consensual forecast of US oil production growth expected by the team as well as our view on US real rates and related gold miners investment recommendations.
Companies covered included Anglo American, Galp, Voestalpine, Thyssen, Aramco, Repsol, BP, Euronav, Gamesa, Kosmos, Apache, Golar, Canadian Natural Resources, RPC, Newmont.
At Palissy we share a vision that commodity and equity research should be different from the classic research bank model. More simply put, we believe that all research should be actionable.
Today, we’re excited to share how we’re accelerating and further realising that vision with Anish Kapadia joining as Director and Head of Energy at Palissy Advisors. Anish, like us, believes that the classic bank research model should evolve towards enabling clients to implement investment ideas.
Anish brings his deep knowledge of the oil and gas sector. He balances financial, strategic and investment considerations and the insight of extensive c-suite interaction with the leading oil companies. He is an experienced global energy expert, having spent 8 years in equity research at UBS Investment Bank as an Executive Director where he helped the team to number one in the Extel Survey and 7 years at Tudor Pickering Holt, as Head of the London Research team covering the global upstream and integrated oil and gas companies totalling >$1 trillion in size. More recently he started his own firm, providing strategy and financial consulting advice to oil and gas companies.
Personally, partnering with Anish carries even more significance. He has produced high impact, differentiated research, having created unique databases on exploration, upstream projects, LNG and decline rates as well as building models on oil and gas fields in around 50 different countries. He has a detailed bottom up understanding of the companies and in depth understanding of all parts of the oil and gas value chain including upstream, downstream, services and LNG. He is a well-known and respected analyst by senior management at the leading integrated oil companies and I see his arrival as a great validation of our Oil & Gas and Mining differentiated, independent research business model. This is an important milestone for Palissy Advisors.
On behalf of everyone at Palissy, I need to express our deepest appreciation to our clients, who have entrusted us to help them optimise their investments in these ultra-cyclical sectors both on the commodity and equity side. As ever, we are totally committed to you and obsessed with enabling your success.
Oil Supply and Demand Bullish Fundamental's
Why we advised to Sell/Short Energy Equities on the 26th of April 2019
Energy Themes and suggested Structural investments in Energy Equities