The restructuring in the exploration and wells development and subsurface units will see hundreds of job cuts around the world, and will be felt in particular in its offices in Britain and the Netherlands, the sources told Reuters.
The planned 20 % reduction are subject to consultations with employee representative bodies, the sources added.
Shell's oil and gas production division, known as upstream, which includes the exploration and well development units, accounted for over one third of the company's USD 28.25 billion in adjusted earnings in 2023.
Exploration is vital for oil and gas companies in order to replenish depleting reserves and discover new resources that, if developed, can be highly profitable. Shell in recent years made significant discoveries in Namibia which it is now studying for potential development.
A Shell spokesman would not comment on the reduction figures.
"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 USD 2-3 billion by the end of 2025," Shell said in a statement.
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 U.S. rivals.
As part of the strategy, Shell plans to grow its liquefied natural gas division, steady oil production and focus on its most profitable businesses.
Shell in recent scaled back operations in offshore wind, solar and hydrogen, sold retail power businesses, refineries and some oil and gas production, including in Nigeria.
In March, Shell weakened a 2030 carbon reduction target and scrapped a 2035 objective, citing expectations for strong gas demand and uncertainty in the energy transition.
Shell's shares have gained over 8 % so far this year, outperforming its European rivals and Chevron, as investor confidence was buoyed by improving cashflow and the better performance of the company's key assets.
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