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    Shell launches $1.5bn share buyback plan

Summary

Shell sold its Permian business to ConocoPhillips in late October for $9.5bn in cash.

by: Joseph Murphy

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Shell launches $1.5bn share buyback plan

Shell has launched the buyback of up to $1.5bn of shares, the Anglo-Dutch major said on December 2, noting this represented the first tranche of the $7bn in proceeds from the sale of its US Permian basin that it has promised to distribute to shareholders.

The company said the form and timing of the remaining distributions would be announced in early 2022. These pay-outs are in addition to the 20-30% of cash flow from operations that Shell has vowed to deliver to shareholders.

Shell sold its Permian business to ConocoPhillips in late October for $9.5bn in cash. The assets produce on average 175,000 barrels of oil equivalent/day.

Shell made the biggest cut to its dividends after the onset of the pandemic last year, reducing them by two thirds. But following a recovery in oil prices and fuel demand, it promised in July this year to return 20-30% of cash flow to shareholders.

Shell faces calls from activist investors to do more to address its emissions, including by setting a target for Scope 3 emissions from the use of its products by customers. They have also urged the company to break up its business, separating its emerging low-carbon interests from its legacy oil and gas operations, but management opposes this.