Shell Plc is moving forward with plans to divest its offshore wind farms, engaging financial advisers to manage a sale process that could generate in excess of $1 billion, according to people familiar with the matter.
The oil major has appointed advisers from Rothschild & Co. and PJT Partners Inc. to lead the transaction. Sources indicated the company could launch the sale process as soon as the end of this year, with a final sale likely to occur in 2027.
The decision forms part of an ongoing program of asset reductions and cost control measures overseen by Chief Executive Wael Sawan since he assumed leadership more than three years ago. Management has prioritized shedding businesses that deliver lower returns in order to concentrate resources on the company’s core oil and gas operations.
This proposed sale marks a marked shift away from an earlier corporate strategy that emphasized growth into green electricity, notably wind power. That prior approach included ambitions to expand the company’s footprint in renewable generation, a direction that has been scaled back under the current leadership.
The move follows several recent renewable-related divestments. Shell has been reducing its European onshore renewables holdings and is in the process of divesting the Indian renewable power company Sprng Energy, which it acquired in 2022 for $1.55 billion. In addition, the company abandoned plans last year to develop offshore wind projects in Scotland.
People familiar with Shell’s strategy say the company’s pivot reflects a sustained effort to cut costs and streamline its portfolio by exiting markets where returns have been judged insufficient. Management decided to shelve previous, more expansive plans for renewable electricity generation after the leadership transition in early 2023, prioritizing shareholder returns.
Details on the exact wind farm assets included in the potential sale and the identities of prospective buyers were not disclosed. The timing indicated by advisers suggests a multi-year process that would align a launch late this year with a closing in 2027.
Contextual note - The company’s actions represent a continuation of recent asset sales and project cancellations within its renewables portfolio, aligning capital allocation with management’s stated objective to focus on higher-return segments of its business.