Outlook for 2023 and beyond
Our integrated business model is key to driving our strategy. Shell has a competitive portfolio and we intend to maintain that position as we develop our assets and the mix of energy that we sell to meet the needs of our customers for more affordable, reliable and cleaner energy. By doing so, we aim to generate additional value for our shareholders.
Delivering our strategy will require clear and deliberate capital allocation choices. We approach capital allocation at three levels: enterprise, portfolio and project. The enterprise level is about how we make choices between increasing distributions to our shareholders, investing in our business and strengthening our balance sheet. The portfolio level is about how we allocate capital between our business segments. The project level is about how we evaluate and prioritise investment opportunities.
For cash capital expenditure (capex), the 2023 outlook is in the $23-27 billion range.
Our capital framework target is a distribution of at least 20-30% of cash flow from operations to shareholders and we may choose to return cash to shareholders through a combination of dividends and share buybacks. Subject to Board approval, we aim to grow the dividend per share by around 4% every year. When setting the level of shareholder distributions, the Board looks at a range of factors, including the macro-environment, the underlying business earnings and cash flow of the Shell Group, the current balance sheet, future investment, acquisition and divestment plans and existing commitments.
We have announced an increase of our dividend per share of 15% for the fourth quarter of 2022 as part of our progressive dividend policy. Portfolio allocation affects our ability to deliver on targets we have made, and socio-economic, political and market factors sometimes change our outlooks. Existing global targets are currently under review. While no decisions have been made, to ensure our transition to a net-zero energy business is profitable, it is likely that some business targets may be retired, as part of normal strategy evolution and mindful of existing capital allocation in the latest operating plan. We expect to provide further insights during our Capital Markets Day in June 2023. All targets presented at Capital Markets Day in June will be filed with the SEC.
The statements in this section, including those related to our growth strategies and our expected or potential future cash flow from operations, organic free cash flow, share buybacks, capital investment, divestments, production, absolute emissions and net carbon intensity, are based on management’s current expectations and certain material assumptions. Accordingly, these statements involve risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied herein.