Ammon News - Royal Dutch Shell said on Thursday the majority of its oil and gas reserves will be produced by 2050, playing down the risk of stranded assets as it prepares to reduce its greenhouse gas emissions in the coming decades, Reuters reported.

The disclosure is still a rare admission by a major oil and gas company that some of its reserves may be worthless in a world shifting away from fossil fuels to renewable energy in an effort to stem global warming.

The Anglo-Dutch company said in a document to investors summarising its climate strategy that around 75% of its proved oil and gas reserves will be produced by 2030, with an additional 3% produced after 2040, according to Reuters.

Since late 2019, Shell has wiped out over $20 billion from the value of its oil and gas reserves after lowering the outlook for commodity prices because of the energy transition and the impact on demand of the COVID-19 pandemic.

Shell aims to cut its emissions from well-head to petrol station to net zero by 2050, and has set out intermediate targets, in one of the sector’s most ambitious plans.

The company said it will focus on hydrogen, biofuels and offshore wind as well as carbon-sucking technologies and planting trees, but it has yet to outline exact plans for reaching the target.

Its annual spending is however set to stay focused on oil and gas in the coming years.

Shell, the world’s largest oil and gas trader, said that it sells around 4.6% of energy consumed in the world and produces around 1.4% of total primary energy.

Chief Executive Ben van Beurden said the net-zero strategy is “fully consistent” with the more stringent U.N.-backed goal set in a 2015 Paris conference to limit global warming.

But climate activists have criticised plans to let oil and gas reserves dwindle while using carbon offsets.

The United Nations and research groups last year said that the world plans to produce more than double the amount of coal, oil and gas in 2030 than would be consistent with the Paris goals.

The Anglo-Dutch company said it will put its energy transition strategy to a non-binding vote at its upcoming annual general meeting in May, an unprecedented move for oil and gas companies, said Adam Matthews, Director of Ethics & Engagement for the Church of England Pensions Board, who has led investor engagement with Shell.

“With this latest important step in Shell’s transition from an oil and gas producer to be an energy company, a multi-decadal transition is clearly underway,” Matthews said in a statement.

“This is not the end of investor engagement.”