Shell (SHEL, Financial), the British oil giant, announced plans to enhance shareholder returns and cut expenditures while increasing its focus on the liquefied natural gas (LNG) sector. The company intends to raise the shareholder distribution ratio from the previous 30-40% to 40-50% of operating cash flow. Additionally, Shell commits to maintaining a progressive annual dividend growth of 4% and aims for an average annual growth of over 10% in free cash flow per share by 2030.
Shell also plans to reduce its annual spending to $200-220 billion by 2028. Previously, the company set its spending target for 2024-2025 in the range of $220-250 billion. Moreover, Shell aims to increase its structural cost reduction target from $2-3 billion by the end of this year to a cumulative $5-7 billion by the end of 2028, based on 2022 plans.
As the world's largest LNG trader, Shell anticipates an annual average growth of 1% in total production from its upstream and integrated gas businesses by 2030. During the same period, LNG sales are expected to grow at an annual rate of 4-5%. Oil production will remain at the current level of 1.4 million barrels per day until 2030. The company plans to allocate 10% of its capital expenditure to low-carbon businesses by 2030.
Shell's CEO emphasized the company's goal to become a leading integrated gas and LNG enterprise, focusing on creating a customer-centric integrated energy trading platform while maintaining substantial oil production. The company is enhancing key financial metrics and investing in core areas to deliver greater value to shareholders.
