MEMO FROM THE FUTURE: SHELL
CEO Edition
BOARD STRATEGY SESSION June 2030
TO: Shell Board of Directors
FROM: Wael Sawan, CEO
DATE: June 2030
SUBJECT: AI Exploration, LNG Leadership, and Data Center Power
OPENING
Shell is an energy major: oil, gas, renewables. Strategically, we're facing headwinds on oil/gas but tailwinds on LNG (Asia demand) and data center power (AI infrastructure needs power). AI can optimize all three: exploration, operations, and customer relationships.
This memo proposes leveraging AI to extend profitable oil/gas operations while pivoting toward LNG and data center power.
THE REALITY
Current state: - Revenue: $230 billion (oil, gas, renewables) - Oil and gas revenue: 85% of total - LNG revenue: $45 billion (growing) - Renewable revenue: $2 billion - Operating margin: 12-15% (highly cyclical)
Opportunity: - AI can improve exploration success rates 20-30% - LNG demand in Asia growing 5-7% annually - Data centers need 50-100 GW power by 2035 - This is where growth is
WHERE WE ARE
Today: - Global oil and gas major - Growing LNG business (Asia focus) - Limited renewable energy footprint - Technology infrastructure being modernized
THE OPPORTUNITY
Opportunity 1: AI-Powered Exploration and Production
The play: Use AI to find and extract oil/gas more efficiently, extending field life and improving economics.
How: - AI-powered geological analysis (improve exploration success 20-30%) - AI-optimized drilling and production (reduce costs 15-20%) - Predictive maintenance (reduce downtime) - Emissions reduction (AI detects and prevents leaks)
Estimated impact: - Extend profitable oil/gas operations 5-10 years - Improve production costs 15-20% - Better emissions profile - Extend reserve life
Timeline: 12-24 months
Opportunity 2: LNG Scale and Data Center Power
The play: Become the dominant LNG provider to Asian data centers and large industrial customers.
How: - Build LNG export capacity to supply Asian power generation - Offer long-term contracts to data centers and utilities - Use AI to optimize LNG logistics and pricing - Potentially develop data center power business
Estimated impact: - LNG revenue reaches £60-70 billion by 2035 (from £45B today) - Premium pricing for reliable LNG supply - Data center power: £10-15 billion new revenue by 2035
Timeline: 2-5 years
Opportunity 3: Energy Services and AI Optimization
The play: Build premium services around AI-powered energy optimization for industrial customers.
How: - AI helps industrial customers optimize energy consumption - Consulting services for energy efficiency - Custom energy solutions - Software/SaaS model (recurring revenue)
Estimated impact: - New revenue stream: £2-4 billion by 2035 - High margins (70%+ gross margin) - Defensible (requires energy expertise)
Timeline: 18-24 months
MY RECOMMENDATION
Pursue all three. Exploration/production maintains cash flow. LNG and data center power are growth. Energy services are margin-accretive.
EXECUTION PLAN
Phase 1: AI Exploration and Production (2030-2032)
- Deploy AI across exploration and production
- Improve efficiency and extend field life
- Maintain profitability through energy transition
Phase 2: LNG Scale (2031-2035)
- Build LNG export capacity
- Land data center and industrial power contracts
- Revenue reaches £60-70B
Phase 3: Energy Services (2032-2035)
- Launch AI-powered energy optimization services
- Build software/SaaS business
- Revenue reaches £2-4B
FINANCIAL IMPLICATIONS
By 2035:
- Oil and gas revenue: £50-60 billion (decline from £195B today)
- LNG revenue: £60-70 billion (up from £45B today)
- Data center power: £10-15 billion (new)
- Energy services: £2-4 billion (new)
- Total revenue: £130-150 billion (down from £230B today)
- Operating margin: 14-16% (stable, despite energy mix shift)
Stock dividend: Sustainable at 6-7% yield throughout transition.
Wael
Confidential — Board of Directors Only