Oil giant Royal Dutch Shell has said it will hike payouts to shareholders amid the recovery in the global economy.
The group said it plans to increase shareholder distributions to within the range of 20% to 30% of cash flow from operations, starting from its second quarter results announcement on July 29.
It said the move comes on the back of a “strong operational and financial delivery, combined with an improved macro-economic outlook”.
Oil prices have been rebounding as demand for crude has begun to recover, with many countries now emerging out of coronavirus lockdowns thanks to vaccination programmes.
Earlier this year, Shell reported a better-than-expected 13% rise in earnings for the first quarter after the cost of crude had jumped by nearly 50% since the end of last year.
In its latest update, Shell also revealed that it expects to have further slashed its debt pile in its second quarter and will ditch its “milestone” 65 billion dollar (£47 billion) debt target, instead moving to goals including further strengthening of its balance sheet.
The group had already reduced its net debt to 71.3 billion US dollars (£51.6 billion) in the first quarter and revealed at the time that it would increase the amount of money it distributes to shareholders when the debt target was reached.
Shell added on Wednesday that 2021 capital spending will remain below 22 billion US dollars (£16 billion).
The group said production is expected to fall across its integrated gas and upstream oil operations.
It said upstream oil underlying earnings would see any boost from currency effects offset by higher spending on planned maintenance in the second quarter.