Under a new financial plan announced ahead of an investor conference in New York, Shell said it would increase total shareholder allocation to between 30-40% of cash flow from operations, up from 20-30% previously.
The program also includes a 15% increase in dividends and an increase in the rate of the share buyback program in the second quarter to $5 billion from $4 billion.
The announced financial framework is at the center of Sawan’s efforts to improve the performance of Shell shares against its peers in the United States, after many investors shunned the British company, even after it posted record profits of $40 billion last year.
The group worried about moving away from oil and gas at a time when energy prices were skyrocketing, while revenues from renewables and low-carbon companies remained weak.
“Performance, discipline and simplicity will be our guiding principles,” said Sawan, who took over in January.
“We will invest in the models that generate the highest returns and that build on our strengths.”
The dividend increase, to around 33 cents per share, is the sixth since Shell cut its 47 cent dividend by around two-thirds in April 2020, which was the first cut since World War II, following of the Covid-19 pandemic. .
RBC analyst Biraj Purkhataria said the higher rate of return would make Shell “competitive with its peers”.
Leaving Pakistan
On the other hand, Shell Pakistan announced on Wednesday that its parent company, Shell Petroleum Limited, will leave Pakistan by selling its 77% stake in the local company.
The milestone came after Shell Pakistan suffered losses in 2022 due to currency exchange rates, depreciation of the Pakistani rupee and overdue receivables, and at a time when the country was facing a financial crisis and a economic downturn.
“To support its operations and streamline its portfolio, Shell Petroleum Limited has started the process of selling its 77.42% stake in Shell Pakistan Limited,” a Shell Pakistan spokesperson said.
The spokesperson added that this includes “all the work of the company’s affiliated pipeline company and its stake in the ‘Pak-Arab Pipeline’ company amounting to 26%.
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