Shell to scrap planned oil output cut but keep net-zero target

Shell will keep oil production steady or slightly higher into 2030 as part of CEO Wael Sawan’s bid to regain investor confidence and improve the company’s performance as its shares lag rivals, Reuters reported Friday.

Shell previously flagged a crude output reduction of between one and two percent per year as part of its carbon neutrality plan unveiled in 2021 and based on 2019 output.

The group said Wednesday that it had already cut average daily liquids production to 1.5 million barrels per day by the end of 2022 on divestments.

“Our target of a reduction in oil production by 2030 has not changed. We’ve just met it eight years early,” a spokesman added.

Shell also revealed it would pay out at least $5 billion in share buybacks in the second half of this year.

The group will additionally cut capital spending to between $22-25 billion for 2024 and 2025, and slash annual operating costs by $2-3 billion by the mid-decade.

“Performance, discipline, and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions, while enabling the energy transition,” said chief executive Wael Sawan.

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