Shell increases shareholder returns, LNG sales projections while cutting spending
Shell plc laid out plans to strenthen its position as a leader in LNG and energy trading as part of its goal to become a simpler, more resilient, and more competitive company.
Wael Sawan, Shell’s chief executive officer, outlined new targets for the company at its 2025 Capital Markets Day, including an increase in shareholder distributions to 40-50% of cash flow from operations through the cycle from 30-40%, while continuing to prioritize share buybacks and maintaining a 4% per year progressive dividend policy.
The operator raised its cost reduction targets, increasing its structural cost savings goal to a cumulative $5-7 billion by end-2028 from $2-3 billion by end-2025, compared with 2022 levels.
Capital discipline remains a priority, Wael said. Shell has set a focused capital spending plan of $20-22 billion/year for 2025-2028, down from a previous $22-25 billion range. The company also expects to grow free cash flow (FCF) per share by more than 10% per year through to 2030.
LNG, upstream
Shell plans to grow LNG sales by 4-5% per year through to 2030 as the market is expected to expand amid rising global demand for cleaner energy solutions, the company said.
During a conference call, Sinead Gorman, chief financial officer, said the LNG sales target would be supported by Shell’s own production as well as volumes obtained from other producers.
In its 2025 LNG outlook, Shell projects that global demand for LNG will increase by about 60% by 2040, fueled by economic expansion in Asia, the influence of artificial intelligence (AI), and initiatives to reduce emissions in heavy industries and transportation.
Meantime, Shell aims to grow top line production across its combined Upstream and Integrated Gas business by 1% per year to 2030, sustaining 1.4 million b/d of liquids production to 2030, while reducing carbon intensity.
Downstream, renewables
Shell plans to drive cash flow resilience and higher returns in its downstream and renewable energy businesses by focusing on high-margin opportunities and operational efficiencies. The company aims to achieve:
- Pursue focused growth in high-return Mobility and Lubricants businesses.
- Leverage competitive strengths to drive profitable and scalable businesses across lower carbon platforms, where Shell expects to have up to 10% of capital employed by 2030.
- Unlock more value from its Chemicals assets by exploring strategic and partnership opportunities in the US, as well as high-grading and selective closures in Europe, aimed at enabling business prosperity while improving returns and reducing capital employed by 2030.
