Feb 10, 2017
Shell and Chevron hold good cards as oil rebounds
Like Shell, Chevron has had to raise debt and sell assets to fund its dividend, but this year both companies are on course to cover shareholder payouts and capital spending from cash flows at current oil prices. With their reserves refreshed, Shell and Chevron are now focused on deleveraging and have no need to join BP in lifting investment. Chevron is this year cutting its capital spending for a fourth year in a row, while Shell's is projected to fall 7 per cent to about $25bn - $20bn less than what Shell and BG spent combined in 2014. This burst of spending will push up BP's break-even point - the oil price needed to cover investment and its dividend - to $60 per barrel this year from $55 at the end of last year. Mr Trump's hawkish stance towards Tehran poses potential threats to provisional agreements by Shell and Total to invest in big Iranian oil and gas projects.
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