Oil giant Shell is aiming to protect its $15 billion (£10 billion) of dividend payments to shareholders amid ‘lower forever’ oil prices by cutting costs. Shell will pay down debt and curb spending amid continued low oil prices, according to reports. Its capital expenditure for 2016 was initially expected to be around $33 billion. This was revised down to $30 billion and is now expected to be slightly lower again at $29 billion.
Crude oil price has settled to about $50 a barrel. In January it hit a 12-year low of $28, compared to $100 two years ago. Shell said spending would not rise up again in line with oil prices if they do recover as it wished to ‘thrive’ in a ‘lower forever’ environment.
[Source: New Model Adviser - By William Robbins - June 8, 2016]
