Shell distributes 15% and focuses on gas and oil, in spite of climate objectives….
In the end, oil is not so bad for profits. Shell plans to raise its dividend by 15%, starting with the second-quarter 2023 interim, as the British oil and gas multinational pledged on Wednesday to grow its gas business and expand its position in the upstream.
In 2021, Shell said its oil production peaked in 2019 and was set for a continued decline over the next three decades as it turns to the renewable energy sector. But then things went differently.
The recovery in demand for oil and gas after the Covid crisis and the Russian invasion of Ukraine, with the resulting severe dislocation of energy trade, has clearly shown "the fragility of the energy system when we deprive it of the necessary supply", CEO Wael Sawan told the Times earlier this year. Sawan said in March that Shell's plan to cut oil production by up to 2% a year for this decade is currently under review, so no cuts in consumption.
Today, on Shell's Capital Markets Day 2023, Sawan said,
“We are investing to provide customers with the secure energy they need today and long into the future, while transforming Shell to win in a low-carbon future. Performance, discipline and simplification will be our guiding principles in allocating capital to improve distributions to shareholders while enabling the energy transition.”
Shell will focus on growing its integrated gas business and maintaining leadership in the global liquefied natural gas (LNG) market, as well as “ extending its lead position in Upstream to achieve cash flow longevity by stabilizing production of liquids until 2030″ .
The company reaffirmed its commitment to climate goals, including net-zero emissions by 2050, but shifted focus to capital and cost discipline, which will allow it to increase payouts to shareholders by 30-40% of CFFO over the cycle, versus 20-30% previously, through a combination of dividends and share buybacks.
Shell plans to launch share buybacks of at least $5 billion in the second half of 2023, subject to board approval.
In February, Britain's other major oil firm, BP, said in its latest strategy update that its aim is to produce more oil and gas in the near term, in a move welcomed by the market.
Separately, Shell is set to exit Pakistan after accumulating losses in 2022 due to the devaluation of the Pakistani rupee and overdue credits following the country's economic crisis.
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The article Shell distributes 15% and focuses on gas and oil, in spite of climate objectives…. comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/shell-distribuisce-il-15-e-punta-su-gas-e-petrolio-alla-faccia-degli-obiettivi-climatici/ on Thu, 15 Jun 2023 06:00:45 +0000.