Shell (NYSE:SHEL) executives highlighted “consistent delivery and real progress” in 2025 while outlining how the company is pursuing higher returns, lower costs, and progress on emissions goals during its fourth-quarter and full-year 2025 results call.
Chief Executive Officer Wael Sawan opened the presentation by reiterating that safety remains the company’s top priority, noting that four colleagues “tragically lost their lives” in Shell’s operated businesses during 2025. He said process safety showed improvement, with 30% fewer incidents year-over-year, while emphasizing that improving personal and process safety remains a continuous journey.
Cost reductions, capital discipline, and shareholder returns
The company also reiterated its capital allocation framework, including maintaining cash capital expenditures in a $20 billion to $22 billion range. Sawan pointed to “tough choices” to enhance returns, including stopping construction of the biofuels plant in Rotterdam.
Chief Financial Officer Sinead Gorman said Shell’s distribution range of 40% to 50% of cash flow from operations (CFFO) “remains sacrosanct.” She said the company delivered at the top end of that range in 2025 and announced:
- a 4% dividend increase in line with Shell’s progressive dividend policy, and
- a $3.5 billion share buyback program expected to complete by the Q1 results announcement in May.
Gorman added that the buyback announcement marked the 17th consecutive quarter in which Shell has announced $3 billion or more in buybacks.
Fourth-quarter and full-year 2025 financial performance
Gorman said fourth-quarter 2025 results were lower due to non-cash tax impacts and lower oil prices, partly offset by strong operational performance. Shell reported adjusted earnings of about $3.3 billion for the quarter and generated $9.4 billion of CFFO in Q4 despite typical year-end payments.
For the full year, Gorman noted that Brent prices averaged more than $10 per barrel lower than the prior year, but said operational performance drove “solid financial results” in the lower-price environment. Shell reported full-year adjusted earnings of $18.5 billion, nearly $43 billion of CFFO, and just over $26 billion of free cash flow.
Operationally, she said integrated gas and upstream had a strong year with high controllable availability and increased production, including higher-margin upstream volumes in the Gulf of Mexico and Brazil. In Downstream and Renewables and Energy Solutions, Gorman said mobility and lubricants benefited from higher margins tied to premium product sales and lower operating costs, resulting in year-over-year ROACE improvements to over 15% for mobility and over 21% for lubricants, both delivering “their best-ever results” in 2025.
Chemicals and products had a “mixed year,” with stronger refining performance offset by low chemical margins and lower trading and supply contributions. Gorman said Shell’s Renewables and Energy Solutions performance was in line with expectations.
Portfolio actions and growth priorities
Management described several portfolio moves in 2025. In Upstream, Sawan said Shell completed the divestment of SPDC in Nigeria and closed the Adura joint venture in December, which he described as the U.K. North Sea’s largest independent producer. In Chemicals and Products, he said Shell divested a loss-making asset in Singapore and is working to reposition the chemicals portfolio.
In marketing, Sawan said Shell continued to “high-grade” the portfolio, closing or divesting about 800 lower-performing branded mobility sites. In power and low-carbon options, he said Shell divested projects such as Atlantic Shores and ScotWind and diluted parts of the Savion portfolio, aligning the business with a greater focus on flexible generation and trading.
Shell also reiterated LNG ambitions. Sawan said Shell aims to grow LNG sales 4% to 5% per year through 2030 and noted that sales grew 11% in 2025, supported by the “highest number of cargoes delivered in a single year.” He said LNG Canada started up during the year and is continuing to ramp up to full capacity, and Shell also completed the acquisition of Pavilion Energy.
On oil and gas project development, Sawan said Shell committed to bring projects online that at peak will add more than 1 million barrels of oil equivalent per day by 2030, adding that more than a quarter of that new production had already started up by the end of 2025. He also cited increased interests in deepwater positions in the Gulf of Mexico, Brazil, and Nigeria, along with final investment decisions for Kaikias water flood in the Gulf of Mexico and Gato do Mato (renamed Orca) in Brazil, plus additional exploration acreage in Angola, South Africa, and the Gulf of Mexico.
Analyst Q&A: reserves, chemicals, LNG, and capital allocation
During Q&A, executives addressed investor concerns about reserves and resource life. CEO Sawan framed the issue around “intrinsic value creation” and value per share rather than optimizing a single metric, while acknowledging the company has a resource gap looking out to 2035 that it plans to fill with a high investment bar. Gorman said Shell’s reserve life (R/P) is about 7.8 years, down from nine, attributing the change to conscious decisions including the SPDC sale and changes related to oil sands, with capital moved toward high-margin deepwater barrels that have different R/P characteristics.
On chemicals, Sawan said the business remains a priority for 2026, reiterating that Shell is evaluating strategic options but does not want to sell at “bottom of cycle” conditions. He also said Shell has identified “a few hundred million dollars” of cost and capital reductions and is considering unit-by-unit shutdowns where required to move the business toward free cash flow neutrality, adding that “nothing is off the table.”
Asked about trading’s contribution, Gorman said 2025 was a good year and placed the ROACE uplift from trading toward the lower end of the previously discussed 2% to 4% range, while noting that Q4 is typically softer for crude and products trading.
Management also discussed LNG market conditions and potential volatility. Sawan said long-term LNG demand remains constructive, calling LNG a stabilizing force in energy systems and pointing to record LNG imports into Europe. He said Shell benefits from diversified supply and demand, multiple indexations (including Brent, TTF, Henry Hub, and AECO), and trading capabilities that can help create value through volatility.
In response to questions about Adura’s impact, Gorman said production will be reduced in Shell’s upstream outlook due to the venture’s standalone structure, while Shell expects “considerable dividends” from Adura, though she noted Shell does not provide guidance for the venture.
Executives also addressed rumors about specific asset sales, with Gorman disputing press speculation that Shell had said it was selling a particular asset referenced by an analyst. Separately, she said Shell is “not divesting from assets that we have high conviction in,” including LNG Canada, while emphasizing that capital reallocation decisions are driven by returns and opportunities to maximize value.
Looking ahead, Sawan said Shell entered 2026 as a more resilient organization, emphasizing lower costs, further performance improvements, and the potential of AI. He said Shell will continue to focus on disciplined investment decisions and countercyclical opportunities, while reiterating confidence in delivering on the financial targets set at CMD25.
About Shell (NYSE:SHEL)
Shell plc (NYSE: SHEL) is a global integrated energy company that operates across the full oil and gas value chain as well as in developing lower-carbon energy solutions. The company traces its roots to the early 20th century merger of Royal Dutch Petroleum and Shell Transport and Trading, and today it is organized to explore for and produce hydrocarbons, process and refine them, manufacture petrochemicals, and market fuel, lubricants and related products under the Shell brand around the world.
Shell’s principal activities include upstream exploration and production of oil and natural gas, integrated gas operations including liquefied natural gas (LNG), and downstream refining, supply and marketing.
