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The Third Point security fund seeks the end of Shell

Royal Dutch Shell is under pressure to disband after the Hedge Fund’s Third Point protest group made a huge profit and criticized the oil giant for being disrupted by an unconventional approach.

The Third Amendment, led by Daniel Loeb, encouraged Shell to split into “several independent companies”, including a “heritage” arm that focuses on oil and gas that could “delay capex than promised earlier”. The cost is estimated at $ 750m, according to a source familiar with the matter.

The move to the New York hedge fund comes less than six months after a court in The Hague ordered an Anglo-Dutch company to expedite plans to reduce emissions. It also follows a successful campaign to fight for hedge fund Engine No 1 against Shell’s US counterpart ExxonMobil.

In a letter to shareholders observed by the Financial Times, Third Point stated that Shell “has a number of competitors pushing the various fronts, which have led to uncoordinated, conflicting approaches to trying to appease a few but unsatisfactory interests”.

While Shell’s business has been able to deal with oil spills, Third Point said, another agency should focus on clean energy, “including fewer refunds and aggressive investment in renewable energy and air pollution technology”.

“Following such a bold approach could help reduce CO2 emissions and increase profits for the participants, a success for all stakeholders,” the letter said.

Third Point is one of Wall Street’s largest retailers and generates about $ 20bn. They are already targeted companies such as Intel and Disney.

The intervention of one of the world’s largest oil companies took place on the day that the top executives of ExxonMobil and Chevron, as well as U.S. leaders Shell and BP, are due to testify in Congress if they misled people into their actions. fossil fuels that cause climate change.

In a popular resolution in May, a The Dutch court ruled Shell to speed up the reduction of carbon-dioxide emissions, while the judge ruled that the company’s plan to reduce pollution was not strong enough.

On the same day, ExxonMobil shareholders appointed three new board managers appointed by Engine No 1, an upstart fund manager who undertook a six-month campaign stating that the company’s plans to further expand oil and gas production and “the existing danger.” ”.

Shell has reported that its oil output reached its peak in 2019. It plans to allow production to be reduced by 1-2 percent a year as it shifts energy bills and other less expensive technologies such as hydrogen. The company last month sold his shale oil business in Permian Texas in the state of $ 9.5bn, an area that he previously described as a key player in his oil and gas business.

Shell did not respond to a request for comment.

Andrew Mackenzie, who was elected Shell chairman in May, has the experience to fight against money laundering. As the CEO of BHP, the world’s largest miner, Elliott Management launched an aggressive campaign to push the company to abandon its oil business and join a single group. Mackenzie pushed back against what Elliot wanted even though BHP was in the process of selling its remaining oil and consolidating its two-pronged form.

Mark van Baal, head of Follow This, a small-scale human rights group at Shell, expressed doubts as to whether the company’s dissolution would have any environmental impact.

“At first, I don’t see how this can help in tackling this problem global warming – and this is because no large portion of Shell can be added. I don’t see what needs to be divided, ”he said. “We think it’s better to make money with mineral oil and put this into stocks.”

But some argue that it could be a watery season.

“It will force Shell to answer a question that has been on the minds of investors for a long time: do Shell’s oil companies add any benefits to greenhouse gas emissions?” Said Andrew Logan, director of the Ceres Oil and Gas Corporation, which co-ordinates climate change.

“If nothing else, the Third Point move shows that Shell has not convinced investors that there is value in keeping all these businesses in the home.”

Additional reports by Tom Wilson and Neil Hume in London

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