British oil major Shell announced plans to boost returns to shareholders and keep oil output steady, as part of its strategy to simplify the group’s business and improve investor confidence.
Ahead of its Capital Markets Day conference in New York later in the day, Shell said it would increase shareholder distributions to 30% to 40% of cash flow from operations, up from 20% to 30% previously.
This includes raising the dividend per share by an expected 15% from the second quarter and executing at least $5 billion of share buybacks in the second half of the year.
“Performance, discipline, and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions, while enabling the energy transition,” said Shell CEO Wael Sawan.
“We will invest in the models that work – those with the highest returns that play to our strengths,” added Sawan, who took office at the start of the year after serving as director of the company’s integrated gas, renewables and energy solutions.
Shell’s focus on performance and capital discipline comes as the company seeks to close what many see as the growing gap in valuations between European and U.S. oil majors. The British oil major reported a record annual profit of nearly $40 billion for 2022.
The firm announced capital spending will be reduced to $22 billion to $25 billion per year for 2024 and 2025, respectively.
