Shell has stated that it is "strengthening its commitment to value creation", in an announcement in which it said it will deliver "more" for its shareholders.

In a statement released on its 2025 capital markets day, the British oil and gas giant said that it will increase shareholder distributions from 30-40% of cash flow from operations to 40-50% as it continues to "prioritise share buybacks".

The announcement comes as the firm said it would also increase its "structural cost reduction target" from $2-3bn (£1.54-2.32bn) by the end of 2025 to a cumulative $5-7bn (£3.86-5.4bn) by the end of 2028.

Furthermore, Shell stated that it will "invest for growth by maintaining capital discipline", with spending being lowered to $20-22bn (£15.4-16.9bn) per year between 2025 and 2028.

It comes as the oil and gas firm reinforced its position in liquefied natural gas (LNG) by increasing sales by 4-5% per year through to 2030, as part of its commitment to "deliver more value with less emissions".

Chief executive officer at Shell, Wael Sawan, said: "We have made significant progress against all of the targets we set out at our capital markets day in 2023.

"We want to become the world’s leading integrated gas and LNG business and the most customer-focused energy marketer and trader, while sustaining a material level of liquids production. Today we are raising the bar across our key financial targets, investing where we have competitive strengths and delivering more for our shareholders."

Investment director at AJ Bell, Russ Mould, added that Shell’s investors are "jumping with joy at its strategy update".

He concluded: "For energy producers in today’s world, the name of the game is to have the money-making machine on full pelt. Shell has its toes dipped in the renewable energy pool but hasn’t jumped face first into all things green. It’s clear that oil and gas remain the primary profit engines.

"Shell’s shares have significantly outperformed BP over the past five years but both have lagged some of their big US peers including Chevron and Exxon Mobil. The UK energy companies would love to narrow the valuation gap and they now are playing catch up.

"Focusing more on oil and gas gives Shell and BP a greater chance of making more money today, as opposed to the energy transition via renewables where the profit story is one for another day. Shell’s decision to cut costs and increase shareholder returns further enhances its attraction to investors and could be its ticket to widening the valuation gap with BP."

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