Shell hikes dividend as weak oil and gas prices hit earnings

OIL GIANT Royal Dutch Shell unveiled a 4.7 per cent jump in its dividend payout yesterday despite posting a slump in full-year earnings.

Annual earnings on a current cost of supply basis dropped six per cent to $27bn (£17.07bn) compared with $28.6bn in 2011 – as it was hit by weaker oil and gas prices – but the dividend was hiked to $0.45 a share on the back of a strong cash flow outlook.

Fourth quarter profits rose 15 per cent to $5.58bn, helped by improved refining margins, although this was below forecasts.

Moving on from a year that chief executive Peter Voser said was beset by “headwinds”, the Anglo-Dutch oil behemoth pledged $33bn of capital investment in 2013 – on its 30 projects under construction – in regions such as Nigeria, Kazakhstan, Iraq and the Arctic.

In a strategy update yesterday, Voser confirmed Shell’s growth plan, which aims to deliver between $175bn and $200bn of free cash flow from operations over the next three years. Markets took the results negatively, and shares in Shell closed down 2.8 per cent at 2,241p.