Royal Dutch Shell has underlined the North Sea’s standing as one of the core oil and gas areas on which it plans to focus, after posting a $21.7 billion (£16bn) loss that reflected the fallout from the coronavirus crisis.
Chief executive Ben van Beurden reiterated yesterday that Shell expects to remain in the oil and gas production for years, even as it pivots to support the transition to a cleaner energy system.
He said Shell would use the cash generated from its nine core oil and gas operations to fund the required investment in areas such as renewables, and payouts to shareholders.BP laid out similar plans on Tuesday.
READ MORE: Does oil giant's vote of confidence in North Sea mark turning point for area?
Mr van Beurden said the outlook had improved in recent weeks, with the rollout of coronavirus vaccines providing a boost. He is confident that demand for oil will recover strongly in the second half of this year. Shell expects demand for gas to grow in coming years. It will be used in an increasing number of industries as a lower carbon source of energy than coal and oil.
However, Shell wrote $21.3bn off the valuation of its assets last year after changing its assumptions regarding future oil and gas prices.
READ MORE: Aberdeen job cuts loom as Shell retrenches
The company has launched a cost-cutting drive that will take a toll on jobs in Scotland. Last month Shell announced plans to shed around 330 jobs in its UK North Sea business which is run from Aberdeen.
Shell yesterday said it planned to increase the dividend payment for the current quarter by four per cent, to 17.35 cents per share, from 16.65 cents for the last quarter of 2020.
In April Shell announced the first cut in its dividend since the second world war. It slashed the first quarter payment for 2020, to 16 cents per share from 47 cents in the preceding three months, to help save cash.
Mr van Beurden said yesterday that it was reasonable for Shell to increase the dividend given the moves it has made to weather tough conditions and to underpin growth in earnings. Royal Dutch Shell A shares closed down 26.8p at 1309.2p.
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