Shell’s strategy and financial framework are designed to manage through multi-year macroeconomic cycles and multi-decade investment and returns programmes. We balance near-term affordability and cost trends with the fundamentally long-term nature of our industry.
Cash flow priorities
Priorities for cash
Buybacks & capital investment
Continue to reduce gearing to 20%
Cancel scrip dividend
Buy back shares
Progress towards a world-class investment case Increase shareholder distributions
Our priorities for cash flow are reducing debt and paying dividends, followed by a balance of share buybacks and capital investment.
Shell’s dividend distributed in 2017 was $15.6 billion. Our dividend policy is to grow the US dollar dividend through time, in line with our view of Shell’s underlying earnings and cash flow. When setting the dividend, the Board looks at a range of factors, including the macroeconomic environment, the current balance sheet and future investment plans.
The company's progress and the confidence in our financial framework enabled the Board to cancel the Scrip Dividend Programme, starting with the payment of the fourth quarter 2017 dividend. With the cancellation now behind us and with strong performance and delivery against our commitments, we are entering the next phase in delivering a world-class investment case.
We will maintain our commitment to the financial framework, continue to grow the company and look to increase shareholder distributions over time. The company is confirming the plans for share buybacks of at least $25 billion in the period 2017-2020, subject to progress with debt reduction and recovery in oil prices.
We continue to manage four cash flow levers: divestments, reduced capital investment and operating expenses, and delivering new projects that will add significant cash flow.