Shell ups shareholder distributions, cuts spending

Shell increased its shareholder distribution policy on Tuesday to 40-50% of cash flow from operations from 30-40% with a focus on share buybacks and lowered its spending outlook to a $20 billion-$22 billion range through to 2028.

The world’s biggest liquefied natural gas (LNG) trader said it wants to grow LNG sales by 4-5% each year in the next five years, while growing its production by 1% per year in that time frame, keeping its oil output stable at 1.4 million barrels per day.

Shell estimates global demand for liquefied natural gas to rise by around 60% by 2040, driven largely by economic growth in Asia, the impact of artificial intelligence and efforts to cut emissions in heavy industries and transportation.

Shell produced 29 million metric tons of LNG and sold 65.8 million tons in 2024.

In terms of changes to its portfolio, Shell said it wants to “unlock more value from our strong portfolio of chemicals assets by exploring strategic and partnership opportunities in the (United States) and both high-grading and selective closures in Europe.”

Shell invested $21.1 billion last year out of a $22-25 billion target range. On Tuesday it said its aim was to spend up to 10% of its budget on low-carbon businesses by the end of the decade.

The oil major has a $3.5 billion buyback for the current quarter, making this the 13th consecutive quarter of at least $3 billion of share repurchases.

At its full-year results in January, Shell hiked its dividend by 4% to $0.36.

On Tuesday, Shell set itself a free cash flow growth per share target of more than 10% annually to 2030, while continuing to cut costs to a cumulative $5-7 billion by the end of 2028 from a 2022 baseline.