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Shell is to scale back its oil and gas exploration and development workforce by 20pc as chief executive Wael Sawan widens his cost-saving drive.

The cuts to the highly profitable division come after deep cuts in renewables and low-carbon businesses, company sources told Reuters.

It comes as global investment clean energy in clean energy to hit $2 trillion this year, according to the International Energy Agency. That is nearly twice the level going into fossil fuels, as governments push for net zero.

Last month, BP predicted that global demand for oil would peak next year. 

The restructuring in Shell’s oil and gas units will see hundreds of job cuts around the world, and will be especially felt in its offices in Britain and the Netherlands, the sources said.

Shell’s oil and gas production division, which includes the exploration and well development units, accounted for over one third of the company’s $28.25bn (£21.4bn) in underlying earnings in 2023.

A company spokesman said: “Shell aims to create more value with less emissions by focusing on performance, discipline and simplification across the business. That includes delivering structural operating cost reductions of $2-3bn by the end of 2025.”

Mr Sawan, who took office in January 2023, has vowed to improve Shell’s performance to boost profitability and narrow a wide gap in its shares’ valuation compared with larger US rivals.

The energy giant has, in recent months, scaled back operations in offshore wind, solar and hydrogen, sold retail power businesses, refineries and some oil and gas production.