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Royal Dutch Shell CEO: Dividends No Longer No.1 Priority

One of our regular contributors has picked up on a priority switch by Shell senior management which may frighten shareholders in Royal Dutch Shell Plc.

During an interview with Michelle Fox of CNBC earlier today, Ben van Beurden the Chief Executive Officer of the company said: In terms of debt paydown and covering of dividends two important priorities – Debt No 1, Dividend No 2. 

Michelle Fox asks… When you say Dividend is number two does this mean you could change the level going forward? 
Mr Van Beurden made reassuring noises about the dividend but noticeably did not backtrack on his relegation of dividend payment levels to being a secondary priority for Shell.
This major change in priority was not actually mentioned in the article.  Readers need to view and listen to the video clip.
He also appears to warn of potential further cuts in staff levels?
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One Comment

  1. veen says:

    Dividends no longer first priority.
    Is it an admissions that the management is not that very smart after all ? Why would the company not maintain its usual dividend rate ? Its usual dividend rate has always been rather modest.

    Has the company always leaned on connections with regimes which gave the oil and gas away for rather low prices ? At what prices did the company buy the crude from Saoud ? and the natural gas from Quatar ? The dutch government has demanded a rather low avarage price for the natural gas out of the dutch gasfields. The dutch price has enabled the company many billions of profits, which it has shared with an american company in the shared dutch explotation company.

    Will the profitability of LNG facilities fade for ever? There has been little care about multiple $ per mmBtu total liquefaction and transport expenses for LNG during spot prices of $ 12 / mmBtu. But recently the spot prices hover around only $ 5 / mmBtu. New LNG projects are not very attractive for investors and exporters. What is the benefit of exporting NG when the customers pay $ 5 / mmBtu only and the expenses for LNG eat away $ 3 up to $ 4.5 of that ? The same counts in particular for long territorial or marine pipelines through teritories or EEZ of third states. The geographical fixation of pipelines and most (expensive) LNG facilities impair the attractiveness for investors, in particular now with multiple more years for earning back the investments.

    Bathymarine CNG-tankers could change the perspectives. The basic principles of bathymarine CNG tankers have been disclosed and published (www Turkmobile com / B ) Bathymarine CNG-tankers would require less than $ 2 / mmBtu and only a very small share of the investments would be geographically fixed.

    In particular the present low spot prices for LNG could encourage the introduction of bathymarine CNG-tankers. They are most interesting for short stretches, for example the crossing of the Black Sea or the Arabian Sea, from Iran to India or the transport from Russia to Japan. The expansion of the LNG trade could be derailed. It is only a matter of the introduction of bathymarine CNG-tankers and them becoming common. They and fluxitex would also derail the expansion of the long conventional heavy steel deep marine pipelines. — Brains instead of steel and billions — The global trade of natural gas and in future hydrogen would become much less dependant on the huge oil and gas companies.

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