Outlook

Today, Shell has a series of measures underway to reshape the company and manage the oil price downturn, spanning asset sales, operating cost and capital spending reduction, and project growth.

Our drive to create a world-class investment case means that around the end of this decade, we expect to deliver fundamentally high free cash flow from the company, and higher returns. At the same time, we intend to reduce our debt, which has increased as a result of the acquisition of BG. And, subject to oil prices, we intend to turn off our scrip dividends and undertake a significant share buy-back programme.

Around the end of the decade, our cash engines should have a more stabilised portfolio. And, with the main divestments and project ramp ups behind us, our growth priorities, especially in deep water, should be delivering free cash flow. Our chemicals business is still expected to be growing, compressing its free cash flow and returns. Shales and new energies portfolios would be ready for more substantial growth investments, if we decide to take such steps.

We see the potential for organic free cash flow to reach $20-$25 billion, with return on capital employed of around 10%, by around the end of the decade, assuming $60 oil prices (2016 real terms basis). This potential represents a substantial transformation in the company over the next few years.