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Oil giant raises dividends and starts buying back shares

The shell logo found at gas stations in London. A court in The Hague has ordered oil giant Shell to reduce carbon emissions by 45% by 2030 compared to 2019 levels. This is widely regarded as a groundbreaking event.

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London — Oil Giant Royal Dutch shell On Thursday, it reported higher-than-expected earnings in the second quarter, further supporting Energy Major’s plans to reduce net debt and reward investors.

The Anglo-Netherlands company reported adjusted earnings of $ 5.5 billion over the three months to the end of June.Compared to that $ 638 million In the same period a year ago $ 3.2 billion The first quarter of 2021.

According to Refinitiv, analysts expected adjusted earnings for the second quarter to be $ 5.1 billion.

Shell has announced the launch of a $ 2 billion share buyback program, which it aims to complete by the end of the year, increasing dividends for the second consecutive quarter.

Second-quarter dividends rose to 24 cents, up 38% from the first three months of the year. It was a year later that the company moved to reduce dividends to shareholders for the first time since World War II.

Shell CEO Ben Van Baden told CNBC’s Squawk Box Europe Thursday that “the current shareholder base is happy with our actions regarding payments, reflecting the company’s plans to increase shareholder distribution. You need to make sure that you do. “

“We need to have a strong cash-generating business that will fund the company for the future, but at the same time we need to build a future-oriented business.”

The results reflect a wide range of trends across the oil and gas industry, as energy majors are trying to reassure investors who have gained a stable foundation in the ongoing coronavirus pandemic.French TotalEnergies And Norwegian Equinor We also announced a share buyback program.

Stock prices of the world’s largest oil and gas majors have yet to keep up with improving earnings outlooks, and the industry still faces many uncertainties and challenges.

Shell’s share rose more than 4.5% during early afternoon trading in London. Stock prices of oil and gas companies collapsed by almost 45% in 2020 and have risen by more than 17% to date.

Investor skepticism

Shell’s financial results come from oil and gas prices rising further in recent months.International Benchmark Brent Crude Oil Futures Rise to an average of $ 69 a barrel In the second quarter, it increased from an average of $ 61 in the first three months of the year. The oil contract was last seen trading at $ 75.38.

Oil prices have reached their highest levels in years in recent months, and all three major forecasting agencies in the world (OPEC, International Energy Agency and Energy Information Administration) expect demand-driven recovery to accelerate second. I am. Half of 2021.

Following the year the IEA chief suggested that it might represent the worst in the history of the oil market. The oil and gas industry benefited in 2020 as the spread of Covid-19 coincided with historic fuel demand shocks, plunge in commodity prices, unprecedented write-downs and tens of thousands of headcount reductions.

Prior to this earnings season, analysts are likely that energy companies will try to insist on a clean health bill, but investors sayAwesome degree“Skepticism about the long-term business model of oil and gas companies. This is primarily a growing climate emergency. Urgent need to pivot away from fossil fuels..

Court ruling

Earlier this month, Shell confirmed his intention to appeal. Breakthrough Dutch Court Decision We have ordered the company to take much more aggressive action to reduce carbon dioxide emissions.

“Urgent action is needed and I agree to accelerate the transition to Net Zero,” said Shell Van Baden. Said In a statement on July 20th. “But the court’s ruling on a single company is not valid, so we appeal.”

“What is needed is a clear and ambitious policy that will bring about fundamental changes in the overall energy system,” he added.

Members of the environmental group Milieu Defensie celebrate the decision of the Dutch environmental organization’s lawsuit against the Royal Dutch Shell Plc on Wednesday, May 26, 2021, outside the judiciary building in The Hague, the Netherlands. Shell was ordered to slash by a Dutch court. Its emissions are more difficult and faster than planned, hitting oil giants that could have a significant impact on other fossil fuel industries around the world.

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Dutch court Domination On May 26, Shell will need to reduce carbon emissions by 45% from 2019 levels by 2030. This is a far higher reduction than the company’s current goal of reducing emissions by 20% by 2030.

The court ruling also stated that Shell was responsible for its carbon emissions and its supplier’s emissions, known as Scope 3 emissions.

The ruling was considered the first in history that companies were legally required to align their policies with the Paris Agreement. Ratified in about 200 countries in 2015, the agreement is considered very important in avoiding the worst effects of climate change.

Oil giant raises dividends and starts buying back shares

Source link Oil giant raises dividends and starts buying back shares

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