July 26 (UPI) -- With debt obligations easing, Royal Dutch Shell said Thursday it was making progress through divestments and announced a $25 billion share buyback program.
Royal Dutch Shell CEO Ben van Beurden said in announcing second quarter results that the share buyback was indicative of a stronger balance sheet and growing confidence.
"This move complements the progress we have made since the completion of the BG acquisition in 2016, to reshape our portfolio through a $30 billion divestment program and new projects, to reduce net debt, and to turn off the scrip dividend," he said in a statement."Our financial framework remains unchanged."
A Shell subsidiary in May established an underwriting agreement with banks like Goldman Sachs to sell the 97.5 million shares it holds in Canadian Natural Resources Ltd., which represents the Dutch supermajor's entire holdings, for $3.3 billion. The Dutch company has been unloading assets at a steady pace since the deal for BG Group.
Shell in June sold gas assets in Thailand and its entire 44.56 percent interest in the Draugen field and its 12 percent in the Gjøa to Norwegian energy company OKEA, which said it grabbed "high-quality" assets offshore Norway through the acquisition.
Total divestments for the first half of the year amounted to $3.8 billion. Debt for the first half of the year was down 4.5 percent from the six months ending Dec. 31.
"Our free cash flow outlook and the progress we have made to strengthen our balance sheet give us the confidence to start our share buyback program," van Beurden said.