Page 4 - EurOil Week 28 2021

EurOil COMMENTARY EurOil

Shell promises shareholders

greater rewards

Shell has also promised to keep spending in control and has retired its debt

EUROPE SHAREHOLDERS at Royal Dutch Shell are of the coronavirus (COVID-19) pandemic and
set to reap the rewards of a recent rally in crude the ensuing collapse in oil and gas prices. Since
WHAT: oil prices, with the oil major confirming on then it has sought to woo back investors, rais-
Shell has promised to July 7 it would boost shareholder distributions ing its payout to $0.1665 in October and then by
increase shareholder to between 20% and 30% of cash flow from its another 4% to $0.1735 per share in the first three
returns. operations. months of this year.
The increase in rewards will begin when Shell The company also promised it would keep
WHY: unveils its second-quarter results on July 29. But capital expenditure at below $22bn in 2021.
The company’s the IOC did not say which form the distribu- The promise of greater returns comes as Shell
performance has tions would take: dividends, share buybacks or predicts a strong recovery in its downstream
improved on the back of another option. segment. It expects marketing margins from its
rising oil prices. In its trading update on July 7, Shell also con- oil products business to improve, supported by
firmed it had achieved “strong operational and strong retail unit margins offsetting lower lubri-
WHAT NEXT: financial delivery” in the three months ending cant margins owing to shortages of base oils and
Shell has promised to up June 30, and had paid down some of its debt. additives.
its climate targets after The company previously said it would increase The company’s refining margins are set to
a landmark Dutch court returns once it had brought its net debt to under average $4.17 per barrel in the second quarter,
ruling. $65bn. It said this week it would retire that tar- up from $2.65 per barrel in Q1 and $1.59 in Q4
get, without saying whether or not it had been 2020, Shell said in its update. Motor fuel demand
reached. is rebounding as coronavirus restrictions are
Shell slashed its dividend by two thirds in eased and the summer driving season reaches
April last year to $0.16 per share after the onset full swing. Shell expects its refinery utilisation

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