Shell reported full-year 2022 adjusted earnings of $39.9 billion.

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British oil major Shell on Wednesday it announced plans to boost returns for shareholders and keep oil production stable as part of its strategy to simplify the group’s business and boost investor confidence.

Ahead of its Capital Markets Day conference in New York later in the day, Shell he said it would increase the shareholder distribution to 30% to 40% of cash flow from operations, from 20% to 30% previously.

This includes raising the dividend per share by an expected 15% from the second quarter and doing at least $5 billion worth of share buybacks in the second half of the year.

“Performance, discipline and simplification will be our guiding principles as we allocate capital to improve distribution to shareholders while enabling the energy transformation,” said Shell CEO Wael Sawan.

“We will invest in models that work – models with the highest returns that play to our strengths,” added Sawan, who took over at the start of the year after serving as the company’s director of integrated solutions for gas, renewables and energy.

Shell’s focus on performance and capital discipline comes as the company seeks to close what many see as a growing gap in valuations between European and US oil majors. The British oil major has reported a record annual profit of almost $40 billion for 2022.

The firm announced Wednesday that capital spending will be cut to between $22 billion and $25 billion annually in 2024 and 2025.

Shell shares rose 1.5% on Wednesday. The company’s share price listed in London is slightly lower since the beginning of the year.

“Corrosion Course” with the Paris Agreement

Shell said it would keep oil production at current levels until the end of the decade as part of a bid to get more cash from its oil division. It also reiterated its commitment to climate goals and said it was making “good progress” towards becoming a net-zero company by 2050.

The company will also seek to grow its integrated natural gas business while maintaining leadership in the global liquefied natural gas market.

The burning of fossil fuels such as oil, gas and coal is a major driver of the climate emergency. Shell’s decision to abandon new oil production restrictions has drawn criticism from activist shareholder group Follow This.

Mark van Baal, founder of Follow This, said on Wednesday that Shell’s growth in fossil fuels was putting the company “on a collision course” with 2015 Paris Agreementwith the landmark climate agreement calling for halving carbon emissions by 2030.

“New CEO Wael Sawan would not have dared to grow Shell’s fossil fuel business if more institutional investors voted for the Follow This climate resolution calling for Paris-aligned targets,” he added.

At Shell’s shareholder meeting last month, support for a Follow This resolution calling for tougher targets to reduce emissions by 20% by the end of the decade was achieved. “Shell has yet to answer that 20%,” van Baal said.

Shell’s annual general meeting was held repeatedly violated protesters last month, reflecting a palpable sense of frustration during the Big Oil proxy election season.

The world’s leading climatologists have previously warned that the fight to keep global warming below 1.5 degrees Celsius has reached “Now or never“area, saying last year that “any further delay in joint global action will miss the short and rapidly closing window to secure a livable future”.

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