Shell outlines 2025 results and LNG‑led growth plan

Shell reported full‑year 2025 adjusted earnings of $18.5 billion, with cash flow from operations of nearly $43 billion and just over $26 billion of free cash flow. Chief Financial Officer Sinead Gorman said results were achieved despite Brent crude prices averaging more than $10 per barrel below the prior year, with operational performance offsetting the price impact.

Fourth‑quarter 2025 adjusted earnings were about $3.3 billion, and CFFO was $9.4 billion, a quarter that Gorman said was affected by non‑cash tax impacts and lower oil prices but supported by strong operations. Integrated gas and upstream delivered higher production, including higher‑margin volumes in the Gulf of Mexico and Brazil.

In Downstream and Renewables and Energy Solutions, mobility and lubricants businesses benefited from premium product margins and lower operating costs. Gorman said this drove returns on average capital employed to over 15% for mobility and over 21% for lubricants in 2025, described as their best‑ever results. Chemicals and products had a mixed year, with stronger refining offset by low chemical margins and softer trading and supply.

Chief Executive Officer Wael Sawan told investors Shell has already achieved $5.1 billion of structural cost reductions by the end of 2025, reaching the lower end of its $5–7 billion target range three years ahead of the 2028 deadline set at its CMD25 strategy update. He said nearly 60% of the savings came from operational efficiencies, a leaner corporate center and faster value‑based decision making.

Gorman reiterated Shell’s capital allocation framework, including maintaining cash capital expenditure in a $20–22 billion range. She said Shell’s policy of distributing 40–50% of CFFO to shareholders “remains sacrosanct” and that in 2025 the company delivered at the top end of that range.

For 2025 shareholder returns, Shell announced a 4% dividend increase in line with its progressive dividend policy and launched a $3.5 billion share buyback program expected to complete by the first‑quarter 2026 results announcement. Gorman noted this is the 17th consecutive quarter in which Shell has announced $3 billion or more of buybacks.

Sawan outlined several 2025 portfolio moves aimed at improving returns. In Upstream, Shell completed the divestment of its SPDC business in Nigeria and closed the Adura joint venture, described as the UK North Sea’s largest independent producer. In Chemicals and Products, Shell divested a loss‑making asset in Singapore and is working to reposition its chemicals portfolio.

In marketing, Shell continued to “high‑grade” its network, closing or divesting about 800 lower‑performing branded mobility sites. In power and low‑carbon options, it divested projects including Atlantic Shores and ScotWind and diluted parts of the Savion portfolio, aligning the business with a greater focus on flexible generation and trading.

Sawan said some “tough choices” were made to enhance returns, citing the decision to stop construction of a biofuels plant in Rotterdam. He stressed that Shell is not divesting from assets where it has high conviction, highlighting LNG Canada as one example.

Shell is targeting 4–5% annual LNG sales growth through 2030. Sawan said LNG sales rose 11% in 2025, supported by the highest number of cargoes delivered in a single year. LNG Canada started up during 2025 and is ramping up to full capacity, and Shell completed the acquisition of Pavilion Energy to further bolster its LNG position.

On oil and gas development, Sawan said Shell has committed to projects that at peak will add more than 1 million barrels of oil equivalent per day of production by 2030, with more than a quarter of that new output already onstream by the end of 2025. He cited increased interests in deepwater positions in the Gulf of Mexico, Brazil and Nigeria, final investment decisions for Kaikias water flood and Gato do Mato (renamed Orca), and new exploration acreage in Angola, South Africa and the Gulf of Mexico.

Discussing LNG markets, Sawan described long‑term demand as constructive and LNG as a stabilizing force for energy systems, noting record LNG imports into Europe. Gorman said trading delivered a positive return uplift in 2025, placing the contribution toward the lower end of a previously indicated 2–4% ROACE range.

In response to questions on reserves, Gorman said Shell’s reserve life (R/P) stands at about 7.8 years, down from nine years, reflecting choices such as the SPDC sale and oil sands changes, alongside a shift of capital toward high‑margin deepwater barrels with different R/P characteristics. Sawan said the company sees a resource gap around 2035 but will address it with a high investment bar focused on intrinsic value creation and value per share.

On chemicals, Sawan called 2025 a mixed year and said 2026 is a priority period for turning the business around. Shell is evaluating strategic options but does not want to sell assets at what he described as bottom‑of‑cycle conditions. He said the company has identified “a few hundred million dollars” of cost and capital reductions and is considering unit‑by‑unit shutdowns where required to move toward free cash flow neutrality.

Looking ahead, Sawan said Shell enters 2026 as a more resilient organization, emphasizing further cost reductions, performance improvements and disciplined, potentially countercyclical, investment. He reiterated confidence in delivering the financial targets set at CMD25 while pursuing higher returns, lower costs and progress on emissions goals.