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Shell investors reap dividends from oil revival

Royal Dutch Shell Malikai superlift at a deep-water project in Malaysia. The global business is in a healthier financial state than it has been recently and intends to resume cash dividends

Royal Dutch Shell is expected to signal its return to paying its entire dividend in cash this week, in the latest evidence of renewed confidence in the oil industry. The Anglo-Dutch group, the biggest listed oil company in Europe, makes a proportion of its payments to investors in the form of new shares rather than cash.

The use of this “scrip” dividend has helped to ease the strain on Shell’s balance sheet after the crash in oil prices and while it reduced its debts after its £35 billion takeover of BG Group.

Having now agreed to sell almost $25 billion of assets and to cut its costs to enable it to make a profit at lower oil prices, Shell is in a healthier financial position.

When Shell embarked on the BG Group takeover, it promised at least $25 billion of share buybacks by 2020 to offset dilution from the shares it issued to BG investors as part of the deal. 

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