Proactive Investors - Shell (LON:RDSa) will raise dividends and boost share buybacks as it aims to deliver more value with less emissions alongside increased returns for shareholders.
That was the message from the oil major ahead of its Capital Markets Day.
“Performance, discipline, and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions, while enabling the energy transition,” said Shell chief executive officer, Wael Sawan.
Shell said shareholder distributions would increase to 30-40% of cash flow from operations through the cycle from 20-30% before by a combination of dividends and buybacks.
Shell will raise the dividend by 15% effective from the second quarter 2023 and start share buybacks of at least US$5bn for the second half of 2023.
Capital spending is set to fall to US$22-25bn per year for 2024 and 2025 with annual operating cost structurally reduced by US$2-3 billion by the end 2025.
The FTSE 100-listed firm also plans to grow its Integrated Gas business and maintain leadership in the global liquefied natural gas market and extend its position in Upstream to achieve cash flow longevity by stabilising liquids production to 2030.
Shell reiterated commitment to climate targets, including net-zero emissions by 2050 aiming to achieve near-zero methane emissions by 2030 and eliminate routine flaring from its Upstream operations by 2025.
It plans to invest US$10-15bn across 2023 to 2025 to support the development of low-carbon energy solutions including biofuels, hydrogen, electric vehicle charging and carbon capture storage.
“We need to continue to create profitable business models that can be scaled at pace to truly impact the decarbonisation of the global energy system,” said Sawan.