Shell CEO announces end of Europe's energy crisis amid market stability

(MENAFN) Shell's CEO, Wael Sawan, has declared that Europe's energy crisis has concluded, with market prices and volatility returning to pre-Russia-Ukraine crisis levels seen before February 2022. Sawan highlighted this stabilization across the energy sector in the recent quarter, noting that gas, crude, and power prices have all decreased and become more stable. Despite this positive shift, Sawan, who took over as CEO in January 2023 with a commitment to refocus the company on its core business, is preparing Shell for ongoing challenges amid the global energy transition.

Shell exceeded expectations with adjusted second-quarter earnings of USD6.3 billion, up from USD5.1 billion the previous year. The company achieved USD1.7 billion in cost savings and reduced net debt by more than USD2 billion. In response, Sawan announced plans to maintain the dividend and buy back USD3.5 billion in Shell shares quarterly. He emphasized the importance of creating financial flexibility to navigate the anticipated volatility in the energy sector, striving for consistency during both prosperous and challenging times.

Sawan reiterated Shell's commitment to returning between 30 percent and 40 percent of operating cash flows to shareholders, regardless of oil price fluctuations. He assured that dividends would continue to be paid even if oil prices dropped to USD40 per barrel, although he noted that a sustained USD40-USD50 price range for more than 12 months has not been observed in the past two decades. This approach reflects Shell's strategic preparation for a non-linear and volatile transition in the energy sector, ensuring stability and shareholder returns in varying market conditions. 

MENAFN05082024000045015682ID1108516820