Activist Hedge Fund Third Point Calls For Breakup Of Global Oil Major Shell

Third Point, an activist hedge fund that has build a $750m stake in Royal Dutch Shell, has urged oil behemoth to split into multiple companies to increase its performance and market value, Reuters reported.

Daniel Loeb, Third Point’s chief executive officer, described Shell’s current strategy as “incoherent” and called for breaking it in to multiple companies: including one focussed on green energy and another “legacy” arm focussed on oil and gas business.

In a statement, Shell said it “welcomes open dialogue with all shareholders”.

Shell has been under pressure from activists, consumers, regulators, investors and courts across the world to de-carbonize its operations

In May this year, a court in Netherlands ruled that Shell must reduce its emissions. By 2030, Shell must cut its CO2 emissions by 45% compared to 2019 levels, the civil court ordered.

The court order was in response to a petition filed in 2019 by environmental group Friends of the Earth (FoE), alongside six other bodies and more than 17,000 Dutch citizens.

Shell had earlier won approval from the company shareholders to create a carbon-neutral business by 2050.

The Anglo-Dutch company has been torn between green activists who claim that it does not go far enough on decarbonisation roadmap and from a group of investors who say Shell’s strategy lacks the focus of American oil supergiants, who remain centred on oil and gas.

Other global oil major have also come under pressure from activists and investors. In May this year, a coalition of activist investors led by Engine No.1, a small hedge fund, managed to unseat two board members of Exxon-Mobile in a bid to force the company’s leadership to recalibrate its business strategy to focus on global efforts to combat climate change.