Shell targets LNG sales growth, investor returns & spending cuts

(Sharecast News) - Energy giant Shell unveiled plans to increase investor returns, cut spending and lift liquified natural gas sales targets but came in for heavy criticism of chief executive Wael Sawan's pay package. Shell, which is the world's largest LNG trader, added that it would targeting 4-5% annual sales growth in liquefied natural gas in the next five years and grow production by 1% per year in that time frame, while keeping its oil output stable at 1.4 million barrels per day to 2030 with "increasingly lower carbon intensity".

In a statement ahead of its capital markets day, the company said it would enhance shareholder distributions to 40-50% of cash flow from operations from a prior target of 30-40%, while continuing to prioritise share buybacks and maintaining a 4% per annum progressive dividend policy.

Free cash flow per share was forecast by grow by more than 10% a year through to 2030.

The company added that it would lift its structural cost reduction target by the end of 2025 from $2-3bn to a cumulative $5 - 7bn by the end of 2028 from its 2022 baseline and lowered its spending outlook to a $20bn - $22bn range over the next three years.

There was anger from environmental campaigners as it emerged that Sawan's remuneration rose by 8.5% last year, to £8.6m, according to Shell's annual report. The company has pivoted back towards fossil fuel production and downgraded efforts to seek green renewable alternatives.

"After a year of uncharted climate extremes and huge energy bills, which are set to spike again in many countries this year, Wael Sawan's obscene pay packet will feel like a slap in the face for millions," the Guardian quoted Patrick Galey, investigations lead at Global Witness, as saying.

"It's maddening to know that big oil bosses like Sawan are raking it in, as they double down on the oil and gas that's fuelling climate devastation and continue to profit from an energy crisis that's leaving so many of us poorer."

Reporting by Frank Prenesti for Sharecast.com