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Shell tries to win back investors

Shell tries to win back investors

30 Oct 2020

Royal Dutch Shell, Europe’s largest oil company, said on Thursday that it would raise its dividend for the third quarter by about 4 percent to 16.65 cents and keep increasing it by a similar amount annually in an effort to win back investors.

Investors have pummeled Shell’s shares since the company cut its dividend earlier this year for the first time since World War II. The share price was up about 2 percent in trading on Thursday.

Ben van Beurden, the company’s chief executive, said that Shell would be able to afford both increasing payouts to shareholders and the large investments needed to put in place his plans to shift Shell away from emissions generating oil and natural gas to cleaner energy like wind, solar and hydrogen. The idea is to make Shell “ a compelling investment case,” Mr. van Beurden said in a statement.

Shell’s adjusted earnings of $955 million for the third quarter were 80 percent lower than in the period the previous year as the company struggles with lower oil and natural gas prices stemming from the coronavirus pandemic.

Mr. van Beurden said during a news conference that Shell would sharply increase investment in what he labeled Shell’s future businesses to roughly 25 percent of the annual total of capital spending of around $20 billion, from 11 percent. Those businesses including retailing, renewable energy and electric power. Mr. van Beurden said that 2019 was probably Shell’s “high point” for oil production.

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RELATED NYT’s ARTICLE, SAME DATE

Exxon Mobil will cut thousands of jobs as it contends with low oil and gas prices.

Credit…Jim Young/Reuters

Under pressure from low oil and natural gas prices, Exxon Mobil said on Thursday it would cut 1,900 jobs through voluntary and involuntary layoffs in the United States in the next several months.

Exxon also said it is reducing the number of contractors it uses around the world by 14,000 over the next two years. These cuts follow large reductions by other oil and gas companies. On Wednesday, the company said it would maintain its dividend at its current level.

Exxon Mobil directly employs more than 70,000 people and said the new job cuts in the United States would primarily be in its Houston management office.

“These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market condition,” the company said in a statement that cited the drop in energy demand because of the pandemic. The U.S. benchmark oil futures contract was trading around $36 a barrel on Thursday, down from about $56 a barrel a year ago.

Exxon Mobil’s stock, which has dropped sharply this year, was up about 3 percent Thursday afternoon.

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