Oil major Shell said today that it would cancel its scrip dividend programme from the fourth quarter of 2017.
Shell’s move means the fourth quarter 2017 interim dividend and future dividends will be paid out in cash.
The Q4 interim dividend will be announced on February 1, 2018.
But the scrip remains in place for the Q3 dividend, payable on December 20.
BP said a month ago that it would start buying back its own shares to offset dilution caused by its scrip dividend, which allows shareholders to take payments in shares instead of cash.
Shell made its announcement at its 2017 management day.
Updating investors on its strategy, Shell said its outlook for annual organic free cash flow had increased to $25-$30billion by 2020 at a Brent crude oil price of $60 per barrel.
That is $5billion more than the outlook Shell provided during its capital markets day in June 2016.
Furthermore, its $30billion divestment programme between 2016 and 2018 is almost delivered, with deals worth $23billion completed, $2billion announced, and $5billion in advanced progress.
Shell chief executive Ben van Beurden said: “We have increased our outlook for organic free cash flow, which has been consistently strong over the past five quarters.
“We have also made significant progress with our divestment programme, allowing us to reduce net debt in that time.
“Meanwhile, we intend to cancel our scrip dividend programme with effect from the fourth quarter 2017.”
Shell also outlined a new target for reducing carbon emissions from its products.
“Shell aims to cut the net carbon footprint of its energy products – expressed in grams of CO2 per megajoule consumed – by around half by 2050. As an interim step, by 2035, we aim to reduce it by around 20%,” Mr van Beurden said.
“We will do this in step with society’s drive to align with the Paris goals, and we will do it by reducing the net carbon footprint of the full range of Shell emissions, from our operations and from the consumption of our products.”
Mr van Beurden added: “Taken together, these next steps, and the strategy and portfolio strength that underpin them, will deepen Shell’s financial resilience and competitiveness, help to ensure our long-term business relevance and keep us firmly on the path to becoming and remaining a world-class investment.”
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