Shell’s CEO Ben van Beurden updated shareholders and investors at a presentation in London today.
- Competitive performance in low oil prices; planning for prolonged downturn
- Dividend commitment unchanged: 2015 $1.88/share, 2016 at least $1.88/share
- Share buy-back commitment unchanged: $25 billion 2017-2020
- Operating cost reduction in 2015 totalling $4 billion (-10%); 6,500 job reductions in 2015
- Capital investment reduction in 2015 totalling $7 billion (-20%)
- Pro-forma capital investment 2016 for Shell + BG expected to be around $35 billion
- Further reductions in operating costs expected in 2016
- BG transaction on track – ‘grow to simplify’ leads to a more resilient and competitive Shell
Updating shareholders and investors at a presentation in London today, Shell’s CEO Ben van Beurden said:
“Shell’s integrated business and our performance drive are helping to mitigate the impact of low oil prices on our bottom line.
As our results today show, we’re successfully reducing our capital spending and operating costs, and delivering a competitive performance in today’s oil market downturn.
We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery. We’re taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders.
At the same time, we are making good progress with the recommended combination with BG, which should enhance our free cash flow, create an IOC leader in LNG and deep water innovation, and be a springboard to change Shell into a simpler and more profitable company. The regulatory filings process and integration planning are both progressing well.
We will re-shape the company once this transaction is complete. This will include reduced exploration spend, a fresh look at capital allocation in longer term plays, and asset sales spanning upstream and downstream. This should concentrate our portfolio into fewer, higher value positions, where we can apply our know-how with better economy of scale. In essence, we ‘grow to simplify’.
The result should be a simpler, more profitable, resilient and competitive Shell, able to deliver better returns to shareholders
These are challenging times for the industry, and we are responding with urgency and determination, but also with a great sense of excitement for the future.”
