Royal Dutch Shell, Europe's largest oil company, said Tuesday that its alternative-energy strategy would focus more on biofuels than wind or solar energy but revealed that investments in the sector were still only a tiny fraction of its overall business.
Presenting the company's strategy, Shell also said it would raise its dividend payout in 2009 to around $10 billion from $9.8 billion last year.
That came as investors worried that the fall in crude prices since July would press leading oil companies to scale back their generous dividends.
Shell said it has made $1.7 billion in investments in renewable energy and to reduce carbon dioxide emissions over the past five years. That compares with $1.7 trillion in company sales and $126.8 billion in net profit in the 2003-2008 period.
An executive board member, Linda Cook, said that Shell's ultimate goal was to build a ‘‘material business in alternative energy'' and that the company planned to concentrate on biofuels at the expense of wind energy or solar power. Biofuels is the area closest to what Shell already does, she said at a strategy meeting in London broadcast on the Internet. ‘‘It's fuels, our brand is relevant, we're already present in the distribution business,'' Ms. Cook said. ‘‘So that one makes sense.''
In the past year, Shell has signed deals with U.S. companies Virent Energy Systems and Colexis to develop plant-based alternatives to gasoline, with a focus on fuels not based on food crops.
‘‘On wind and solar, they're interesting, but they continue to struggle in comparison with the other investment opportunities we have in our portfolio, even with substantial subsidies,'' Ms. Cook said.
Shell also said its oil reserves were unchanged at the end of 2008 compared with a year earlier. This means that 2008 was the first year the company has not pumped more oil than it has added to reserves since 2004, when an accounting scandal led it to lower its proven reserves by more than a quarter.