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Shell investors in line for £99bn windfall as oil giant’s boss announces fresh strategy for ‘energy transition’ to greener tech

  • Shell is to return $125bn over five years through dividends and share buybacks

  • That’s more than double the $52bn handed between 2011 and 2015

  • Energy group expects new projects will generate $35billion

Shares in Royal Dutch Shell fell despite the oil and gas giant revealing plans to return $125billion (£99billion) to shareholders over five years through dividends and share buybacks.

This is more than double the $52million (£41billion) handed to shareholders between 2011 and 2015.

Shell said it expects to pay for that with money from new projects, which it expects will generate $35billion, assuming oil remains priced at $60 per barrel.

It comes as Shell boss Ben van Beurden announced a ‘refreshed’ strategy for the ‘energy transition’.

The group said it expects to increase capital investments by around $30billion a year, focusing on deep water drilling and shale gas in particular.

‘Natural gas and liquefied natural gas are expected to continue to experience strong demand as the world tackles climate change, poor air quality and population growth,’ Shell said.

In spite of the announcement, the oil and gas giant, which is the biggest company on the FTSE 100, saw shares fall 0.5 per cent to £24.60 towards the close.

Shell said it also wants to continue to grow its power business to take advantage of the increase in electricity usage, with the rise of electric cars.

The Anglo-Dutch company has already bought household energy firm First Utility and rebranded it Shell Energy.

Van Beurden said: ‘All this adds up to a forward-looking strategy that ensures Shell is well-placed to continue to deliver a world-class investment case and thrive in the energy transition.’

Boss van Beurden has been leading an ambitious cost-cutting drive since the industry was buffeted by the 2014 oil price crash.

The group has seen profitability rise in recent years on the back of a rebound in the cost of crude.

Graham Spooner, investment research analyst at The Share Centre said: ‘Shell shares were down in early trading following the announcement. However, the CEO talks of an ‘energy transition’ and is confident of the company being well-placed to reward investors.

‘The outlook therefore appears to be promising but investors should be wary that any material fall in oil prices could once again raise questions about the company’s ability to maintain its dividend.’


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