EurOil: Shell offers shareholders more

Shareholders at Royal Dutch Shell are set to reap the rewards of a recent rally in crude oil prices, with the oil major confirming on July 7 it would boost shareholder distributions to between 20% and 30% of cash flow from its operations.

The increase in rewards will begin when Shell unveils its second-quarter results on July 29. But the IOC did not say which form the distributions would take: dividends, share buybacks or another option.

In its trading update on July 7, Shell also confirmed it had achieved “strong operational and financial delivery” in the three months ending June 30, and had paid down some of its debt. The company previously said it would increase returns once it had brought its net debt to under $65bn. It said this week it would retire that target, without saying whether or not it had been reached.

Shell slashed its dividend by two thirds in April last year to $0.16 per share after the onset of the coronavirus (COVID-19) pandemic and the ensuing collapse in oil and gas prices. Since then it has sought to woo back investors, raising its payout to $0.1665 in October and then by another 4% to $0.1735 per share in the first three months of this year.

The company also promised it would keep capital expenditure at below $22bn in 2021.

In other European oil and gas news, the consortium operating the Trans-Adriatic Pipeline (TAP) has agreed terms with Albania’s energy ministry on the development of a gas entry point at Fier, which in the future will enable the Balkan country to access Caspian gas.

Representing the third and final section of the Southern Gas Corridor (SGC) network of pipelines, TAP began flowing gas from Azerbaijan’s Shah Deniz field across Albanian territory to the Italian market in January. Albania might one day be able to use this gas for its own purposes, but the country currently lacks a gas grid, or any active gas-powered generation.

TAP said the entry point would “significantly strengthen the geo-strategic and commercial role of Albania in the region,” without disclosing when the facility was expected to be completed, how much it would cost to build or its capacity. It will be situated next to a TAP compressor station and will be capable of bi-directional flow. It will include pressure reduction and fiscal metering facilities.

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