Shell unveils €21bn share buyback as half-year earnings jump

Ben van Beurden, chief executive officer of Royal Dutch Shell
Ben van Beurden, chief executive officer of Royal Dutch Shell

Oil giant Royal Dutch Shell has launched a hotly anticipated $25bn (€21bn) share buyback programme as it revealed a leap in earnings.

The stock repurchase announcement has been promised to investors since Shell bought rival BG Group in a mammoth $54bn deal in 2016.

But shares in Shell slipped nearly 2pc as its second quarter earnings came in lower than expected, despite rising 30pc to $4.7bn.

Overall in the first half of 2018, underlying earnings on a current cost of supply basis jumped 37pc to $10.1bn for the six months to June 30 thanks in part to surging oil prices.

Ben van Beurden, chief executive of Shell, said: “We are taking another important step towards the delivery of our world-class investment case, with the launch of a $25bn share buyback programme.

“This move complements the progress we have made since the completion of the BG acquisition in 2016.”

It said it will buy back at least $25bn over the next 18 months, subject to efforts to cut debt and global oil prices.

Shell has been focusing on an ambitious cost-cutting drive and a $30bn divestment initiative since the industry has been buffeted by the 2014 oil price crash.

But oil prices have rebounded recently, with Brent crude rising from around $50 a barrel a year ago to about $75 today.

Shell said it had so far completed around $27bn of asset sales, with over another $7bn announced or in advanced progress.

Its results showed that oil and gas production rose 5.4pc on an underlying basis year-on-year in the second quarter, but was lower than the previous three months.

Richard Hunter, head of markets at interactive investor, said it was an “impressive update” despite missing City expectations.

“The old market adage of ‘Never sell Shell’ is holding firm as the company has unveiled something of a bonanza for shareholders,” he said.

Rival BP reports half-year earnings next week.

Press Association

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