Oil and Gas

Shell to hike shareholder returns after oil price boost

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Key Points
  • Royal Dutch Shell on Wednesday said it will boost its planned shareholder returns beginning in the second quarter.
  • The announcement comes after a sharp rise in oil and gas prices helped it reduce debt.
A Shell tanker truck delivers fuel to a gas station, operated by Royal Dutch Shell Plc., in Rotterdam, Netherlands.
Jasper Juinen | Bloomberg | Getty Images

Royal Dutch Shell on Wednesday said it will boost its planned shareholder returns beginning in the second quarter after a sharp rise in oil and gas prices helped it reduce debt.

In a trading statement ahead of its quarterly results, the Anglo-Dutch company said it would increase distribution to shareholders in the form of share buybacks or dividends in the range of 20% to 30% of cash flow from operations, it said.

The move, which comes earlier than many analysts had expected, was due to "strong operational and financial delivery, combined with an improved macroeconomic outlook."

Shell previously said it would boost returns once its net debt dropped below $65 billion. The company said on Wednesday it would "retire" the target without specifying whether it had hit it.

"In the second quarter, Shell expects to have further reduced its net debt, although the extent of the reduction will be moderated by working capital movements," it said.

Analysts had largely expected Shell to increase distribution towards the end of the year, but a strong rise in oil and natural gas prices in recent months accelerated the timetable.

Shell said it would stick to its spending plans that would remain below $22 billion in 2021.