Shell Agrees to Sell European Renewable Energy Assets to TotalEnergies as Strategy Shifts Toward Oil

BY COMFORT OGBONNA

Shell has agreed to sell its onshore European renewable energy business to TotalEnergies as the company continues to reshape its strategy and focus more heavily on liquefied natural gas and upstream oil and gas operations.

The deal, announced on Monday, includes renewable energy assets across Italy, the Netherlands, Spain and the United Kingdom. The transaction is expected to close by the end of 2026, subject to regulatory approvals and other conditions.

The portfolio includes approximately 0.5 gigawatts of renewable power generation capacity, consisting of projects already operating or under development, as well as a pipeline of future renewable energy opportunities.

The sale reflects a broader shift under Shell Chief Executive Officer Wael Sawan, who has moved to reduce spending on low-carbon energy projects while prioritizing businesses that generate stronger returns, particularly liquefied natural gas trading and traditional energy operations.

Shell has been reviewing its renewable energy investments as part of efforts to improve profitability, strengthen cash flow and deliver higher returns to shareholders. The company has emphasized a more selective approach to clean energy projects, focusing on areas where it believes it can compete effectively.

TotalEnergies also announced a separate transaction involving its European renewable energy portfolio, agreeing to sell a 50% stake in a 1.2-gigawatt portfolio to global investment firm KKR. The portfolio was valued at approximately €1.8 billion.

The French energy company said both transactions align with its strategy of expanding renewable and gas-fired power generation capacity in major deregulated energy markets while monetizing parts of its renewable energy holdings.

TotalEnergies has said it intends to continue growing its renewable energy business while selling stakes in selected projects to investment partners, allowing it to recycle capital and maintain financial flexibility.

The moves by both major energy companies highlight the evolving approach among global oil and gas firms as they balance the transition toward cleaner energy with the need to maintain profitability and shareholder returns in a changing energy market.