Royal Dutch Shell ( RDS.A ) is under pressure from shareholders to cut annual spending below $30 billion after buying BG Group to ensure it can maintain its dividend given the slow oil price recovery, according to a Reuter’s report. ADRs jumped 4.5%.
After the completion of the $50 billion BG acquisition, the Anglo-Dutch company set 2016 spending for the combined group at $33 billion and Chief Executive Officer Ben van Beurden said in February it had “options on the table to further reduce our spending should conditions warrant that step,” the news report said Friday.
“Shell needs to cut capex to give the market confidence that the dividend can be sustained, and grown in future,” the reported cited Charles Whall, portfolio manager at Investec Asset Management, which owns Shell shares, as saying.
Shell ADRs trade near the midpoint of their 52-week range of $35.80 – $64.46.
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