Shell will boost its dividend and trim future spending as part of new chief executive Wael Sawan’s efforts to “simplify” the energy major’s business and increase investor confidence.
Europe’s largest energy company outlined plans to increase shareholder distributions to 30-40 per cent of cash flow from operations, up from a previous target of 20-30 per cent. That will start with a 15 per cent increase in its dividend per share from the second quarter and at least $5bn of share buybacks in the second half of the year, Shell said ahead of an investor day in New York.
Shell added that it would maintain oil production at current levels of around 1.5mn barrels a day until 2030, while continuing to grow its gas business.
“Performance, discipline, and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions, while enabling the energy transition,” Sawan said.
Capital spending in 2024 and 2025 will be reduced to $22-25bn a year, down from a planned $23-27bn in 2023, while group-wide annual operating costs will be cut by $2-3bn by end of 2025, the company said.
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