We should see more action in the engineering outsourcing landscape at Shell

We should see more action in the engineering outsourcing landscape at Shell

👉 Shell has been quite aggressive in its R&D spending focused on transition to low-carbon energy. Along with this there are couple of other areas related to growth in LNG business and obviously the 2050 Net Zero target

👉 A quick view into their engineering outsourcing deals for 2024 suggests a strong push for digital EPC contracting (In May they contracted with a Chinese vendor and last week they signed a deal with L&T Technology Services)

A quick comparison of Shell's business goals mapped to their engineering priorities and acquisitions suggests that there is a long list of activities/workstream which might open-up for grab. Listing a few from the long list here:-

👉 [Product and platform engineering] Amping up efforts in the retailing space with acquisition of BOC with focus on premium experiences

👉 [Renewables] Recent acquisition of Sprng Energy brings in solid infra across wind and solar energy which would require support across connected and EPC engineering services

👉 [LNG expansions] These expansions are twin focused - both LNG infra and R&D across new technology such as LNG as a fuel and CCS. These seem more apt in the consulting and advisory service function while others might end up being more end-to-end deals!

The recent contract with LTTS is just a start and Shell should come across as a major outsourcer beyond the fast-growing EPC and capital projects space. On a similar note, it is interesting to see how the nature of work differs among

LTTS-BP and LTTS-Shell deals!