Shell goes back to paying its dividend in cash

Royal Dutch Shell will resume paying its whole dividend in cash at the end of the year, showing how much the heavily indebted oil company has recovered from the oil price crash of 2014.

Shell’s payout to investors, including most major pension schemes and insurers, will rise from £9.9 billion to £16 billion next year.

Like other oil companies, Shell allowed investors to take part of its dividend in shares in 2015, in a bid to save cash as the oil price plunged.

The company also confirmed it would buy back shares worth at least $25 billion (£18.8 billion) between now and 2020. The shares climbed 62.5p to 2378p.

The oil giant has benefited from a steady recovery of the oil price this year, which reached over $60 a barrel last month. The firm is reaping the gains of last year’s mega-deal to buy BG and has raised money from a £22.5 billion asset sale, including selling some of its North Sea fields.

Shell also said it would generate $5 billion extra in cash than it previously thought, based on a $60 per barrel price.

Ben van Beurden, chief executive, said: “Our next steps as we reshape Shell into a world-class investment aim to ensure that our company can continue to thrive.”