Shell’s Chief Executive Officer, Wael Sawan has been focused on cutting costs and pivoting the company back to its most profitable sectors oil, gas, and biofuels while shifting away from renewables.
This shift is part of a broader initiative to streamline operations and bolster profitability.
For the 13th consecutive quarter, Shell is executing a $3.5 billion buyback, reaffirming its commitment to returning value to shareholders. This is coupled with a 4% dividend increase to $0.36, reflecting the company’s strong financial performance.
On Tuesday, Shell set a bold target for its future, aiming for an annual growth rate of more than 10% in free cash flow per share through 2030.
Additionally, the company is targeting cost reductions of $5-7 billion by the end of 2028, compared to a 2022 baseline.
In line with its increased shareholder distribution policy, Shell announced that it will allocate 40-50% of its operating cash flow to shareholders, up from the previous 30-40%. The company also reduced its capital expenditure outlook, with plans to invest between $20 billion and $22 billion through 2028.
As the world’s largest liquefied natural gas (LNG) trader, Shell aims to boost LNG sales by 4-5% annually over the next five years. It also plans to maintain stable oil production at 1.4 million barrels per day while increasing LNG production by 1% per year.
The company predicts global LNG demand will surge by 60% by 2040, driven by economic growth in Asia, the rise of artificial intelligence, and a shift towards cleaner energy in heavy industries and transportation.
In 2024, Shell produced 29 million metric tons of LNG and sold 65.8 million tons. Additionally, the company is looking to unlock greater value from its chemical assets, with a focus on strategic partnerships in the U.S. and selective closures in Europe.
Last year, Shell’s investment totaled $21.1 billion, falling within its target range of $22-25 billion. Looking ahead, Shell plans to allocate up to 10% of its budget to low-carbon ventures by the end of the decade, signaling its ongoing commitment to transitioning to a more sustainable future while strengthening its core energy business.
