Shell announced a $3.5 billion share buyback, extending its capital return program to a 17th consecutive quarter with repurchases above $3 billion. The buyback follows the company’s fourth-quarter results and is scheduled to be completed by the end of the current quarter. The announcement came alongside confirmation of a 4% increase in the underlying dividend.
The company reported that shareholder distributions in 2025 reached 52% of cash flow from operations. This exceeded its stated through-cycle range of 40–50%. Cash capital expenditure remained within its targeted range of $20–22 billion for the year. Shell said these outcomes were supported by continued cost control and disciplined capital allocation.
Adjusted earnings for the fourth quarter fell to $3.3 billion, the lowest quarterly level since early 2021. Full-year adjusted earnings declined to $18.5 billion from $23.7 billion a year earlier. The weaker results reflected lower oil prices and a softer macroeconomic backdrop. Brent and West Texas Intermediate crude prices were both down around 10% over the past year.
Despite the earnings decline, Shell said structural cost reductions had reached $5.1 billion compared with 2022 levels. The cost savings were achieved across operations and were described as permanent reductions rather than temporary measures. The company stated that these savings helped protect margins in a lower price environment and supported continued cash generation.
In a separate development, Shell confirmed that it has appointed PricewaterhouseCoopers as its new external auditor, effective from the 2027 financial year. The decision followed a competitive tender process and will see PwC replace EY. The change comes after a regulatory investigation into audit partner rotation requirements related to Shell’s 2024 financial statements.
Shell previously disclosed that mandatory audit partner rotation and cooling-off rules had not been fully followed. The company also said it would revise its 2023 and 2024 annual reports to address non-compliance with US Securities and Exchange Commission regulations on audit partner rotation. Shell stated that the revisions would not alter reported financial figures.
Shell shares fell following the release of the fourth-quarter results, reflecting investor reaction to weaker earnings amid lower oil prices. The company maintained that its balance sheet and cash generation capacity continue to support shareholder distributions under its capital framework.
#Investor Takeaway
The buyback and dividend increase confirm continued cash returns despite lower earnings, while cost reductions and disciplined spending underpin near-term shareholder distributions.
#Market Impact
The announcement reinforces Shell’s commitment to capital returns in a lower oil price environment. The share price reaction highlights sensitivity to earnings declines even as distributions remain elevated. Sector sentiment remains tied to crude price trends and cost discipline.
#What’s Next
Investors will monitor completion of the $3.5 billion buyback by quarter-end. Upcoming full-year filings will include revised 2023 and 2024 annual reports. The transition to a new external auditor will take effect from the 2027 financial year.
#Broader Market Context
Other major oil producers have also adjusted shareholder returns amid weaker crude prices. Some peers have reduced buybacks following profit declines, while others have maintained dividend growth through cost control.