The oil giant raises the dividend and leaves share buy back

A Shell logo seen in a gas station in London. A court in The Hague has ordered the oil giant Shell to reduce its carbon emissions by 45% compared to 2019 levels by 2030, in what is widely seen as a reference case.

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LONDON – The oil giant Royal Dutch Shell on Thursday reported stronger than expected second-quarter earnings, paying further support to higher energy energy plans to reduce net debt And reward investors.

This was reported by the Anglo-Dutch company adjusted earnings of $ 5.5 billion for the three months to the end of June. what a respect with $ 638 million over the same period a year before and $ 3.2 billion for the first quarter of 2021.

Analysts expected second-quarter adjusted earnings come in at $ 5.1 billion, according to Refinitiv.

Shell increased the dividend for the second consecutive quarter And announced the launch of a $ 2 billion share buy back program which aims at complete at the end of the year.

The dividend rises to 24 cents 24 in the second quarter, up 38% from first three months of the year. comes a year after the company moved to cut the shareholder dividend for the first time since the second world war.

“We must do sure than ours current the shareholders are satisfied with what do we do in terms of payments, “Shell CEO Ben van Beurden told CNBC’s” Squawk Box Europe ” on Thursday, reflecting reflect on of the company plans to step up its distributions to shareholders.

“We must have strong cash generative business That also finances the company for the future, but at the same time we must build a business this is future-trial.”

The results reflect a broader trend in the oil and gas industry as energy majors seek to reassure investors that they have acquired a stable footing in the midst of the coronavirus pandemic in course. TotalEnergies of France and Equinor of Norway have also announced share buy back programs.

Stock prices of the world’s largest oil and gas majors have not yet followed a improvement in the earnings prospects, however, and the industry has yet to face a host of uncertainties e challenges.

Actions of Shell they were up over 3% during the morning trade in London. The oil and gas company has seen its shares price rise more 17% year-to date, having collapsed by almost 45% in 2020.

Investors’ skepticism

Shell’s financial results come as the prices of oil and gas gas took other step up in recent months. The international benchmark Brent crude futures rose to one media of 69 dollars a barrel in the second quarter, up From one media of $ 61 in the first three months of the year. The oil contract was last seen trading at $ 75.38.

Oil prices rebounded to reach multi-year tall in last months and all three of the world’S main Forecasting agencies – OPEC, the International Energy Agency and the US Energy Information Administration – are now expecting a demand-carried recovery to pick up speed in the second half of 2021.

A year in that the head of The IEA had suggested that it could come to represent the worst in the history of oil markets. The oil and gas industry has been sent in tilt in 2020 like diffusion of Covid-19 coincided with a historic fuel demand shock, collapse in commodity prices prime, unprecedented write-downs and dozens of thousands of job cuts.

After you of this earnings season, analysts had warned that while energy companies would likely try to claim a clean bill of health, investors were expected to hide a “tremendous level” of skepticism about the about business models of oil and gas companies over the long term. This was mainly a result of the deepening of the climate emergency and urgency need move away from fossil fuels.

Judgment of the Court

Earlier this month, Shell confirmed its intention to appeal a historic Dutch court ruling ordering the company to take a lot more aggressive action for drive down its carbon emissions.

“We agree that urgent action is needed and will accelerate our transition to net zero, “Van Beurden of Shell She said in a declaration on July 20. “But we will appeal because a court sentence, against a single company is not effective. “

“What it takes is clear, ambitious policies that drive fundamental change in all the energy system,” he added.

Members of the environment group MilieuDefensie celebrates the verdict of the case of the Dutch environmental organization against Royal Dutch Shell Plc, outside the palace of court of justice in The Hague, The Netherlands, on Wednesday May 26, 2021. A Dutch court ordered Shell to reduce its emissions faster and harder than expected, dealing a blow to the oil giant that could have far-reaching consequences for the rest of the global fossil fuel industry.

Peter Boer | Bloomberg | .

The Dutch court has ruled on May 26 that Shell has to reduce its carbon emissions by 45% by 2030 compared to 2019 levels. That’s a lot higher reduction compared to that of the company current scope of reducing its emissions by 20% by 2030.

The court ruling also said Shell is responsible for its own carbon emissions and those of its suppliers, known as Scope 3 emissions.

The verdict was thought to be the first time in history a company was legally required to align its policies with the Paris Agreement. The agreement, ratified by almost 200 countries in 2015 is considered of fundamental importance in avoid the worst effects of climate change.

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