Royal Dutch Shell shares fell in morning deals as oil price falls and news of an investigation by US authorities overshadowed an upbeat release from the oil major ahead of its strategy update later today.

The Anglo Dutch group said even though it believes the current downturn will last more than a year it remains confident it can lift its dividend by 5% in the first quarter and has the balance sheet flexibility to maintain investment, fund future projects and grow dividends going forward.

It also said the economic slowdown is an opportunity to reduce supply-chain costs.

The group still expects to grow production by 2-3% to 2012 and beyond – much higher than the recently reduced target from BP of 1-2% growth.

It said it replaced 95% of the oil and natural gas it pumped in 2008.

Shares fell back 36p, or 2.28%, to £15.42 as Brent fell back $1.06, or 2.28%, to $45.40.

Investors are still waiting for news on the group’s share buyback programme and some reassurance on its debt position given many commentators expect it to scrap the programme as debts rise.