Market concerns that Royal Dutch Shell (RDSB) has over-prioritised dividends amidst the oil price-sparked profit crunch were partially allayed this week, as a strategic update helped to push shares in the super major up by 3 per cent.
That bullish call was underpinned by several positive financial forecasts. First of all, Shell believes synergies from the BG acquisition could now hit $4.5bn (£3.1bn) by 2018, $1bn more than first anticipated. This should support a potential $20bn-$25bn in organic free cash flow by the end of the decade, even if oil remains at $60 a barrel until then. The cyclical lull in prices means the $30bn of asset disposals targeted by 2018 will be a distinct challenge, although $6bn-$8bn of sales are expected this year.