Shell acts to reinforce business resilience and financial strength despite COVID-19

Royal Dutch Shell says as the COVID-19 virus spreads across the world - seriously impacting people’s health, it way of life and global markets – it is however putting the safety and health of it workers people and customers first, along with the safe operations of all its businesses.

The global oil giant stated further that at the same time, it is taking decisive action to reinforce the financial strength and resilience of its business so that becomes well-positioned for the eventual economic recovery.

“As well as protecting our staff and customers in this difficult time, we are also taking immediate steps to ensure the financial strength and resilience of our business,” said Ben van Beurden, Chief Executive Officer of Royal Dutch Shell.

He said: “The combination of steeply falling oil demand and rapidly increasing supply may be unique, but Shell has weathered market volatility many times in the past.”

Stating that in these very tough conditions, he was very proud of the staff and contractors of the company across the world for maintaining their focus on safe and reliable operations while also ensuring their own health and welfare and that of their families, communities and the company’s customers.

He said order to deliver sustainable cash flow generation, Shell is actively managing all its operational and financial levers – from focusing on maintaining safe and reliable operations each day to reducing capital spend and operating expenses.

He said:” Today, we are announcing that we have embarked on a series of operational and financial initiatives that are expected to result in:

operating costs by $3-4 billion per annum over the next 12 months compared to 2019 levels;

expenditure to $ 20 billion or below for 2020 from a planned level of around $25 billion; and

working capital”.

“Together, these initiatives are expected to contribute $8 - 9 billion of free cash flow on a pre-tax basis. Shell is still committed to its divestment programme of more than $ 10 billion of assets in 2019- 20 but timing depends on market conditions”.

The Board of Royal Dutch Shell has decided not to continue with the next tranche of the share buyback programme following the completion of the current share buyback tranche.

It will continue to review the dynamically evolving business environment and are prepared to take further strategic decisions and consider changes to the overall financial framework as necessary.