30th Jul 2015 05:59
LONDON (Alliance News) - Royal Dutch Shell PLC Thursday reaffirmed its commitment to its dividend alongside a share buyback as the merger with BG Group PLC continues as planned.
The FTSE 100-listed oil and gas company said its plans to pay a dividend of USD1.88 per share in 2015 and at least that for 2016 remains unchanged and also said it would carry out a USD25.0 billion share buyback between 2017 and 2020 as planned.
Shell said it is planning for a "prolonged downturn" in the market caused by lower oil prices and said its operating costs will fall by around USD4.0 billion in 2015, which will be a reduction of about 10%, which includes 6,500 job cuts.
Its capital expenditure in 2015 will also total USD7.0 billion, which will be down 20% year-on-year. The company said further cost reductions are expected throughout 2016.
"Shell's integrated business and our performance drive are helping to mitigate the impact of low oil prices on our bottom line," said Chief Executive Ben van Beurden.
"As our results today show, we're successfully reducing our capital spending and operating costs, and delivering a competitive performance in today's oil market downturn," he added.
Shell's USD47 billion mega-merger with BG Group also remains on track, which will form a new company that will more profitable, said Shell.
"We will re-shape the company once this transaction is complete. This will include reduced exploration spend, a fresh look at capital allocation in longer term plays, and asset sales spanning upstream and downstream. This should concentrate our portfolio into fewer, higher value positions, where we can apply our know-how with better economy of scale. In essence, we 'grow to simplify," added van Beurden.
By Joshua Warner; [email protected]; @JoshAlliance
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