New CEO Tempers Transition Plan as Returns Take Priority

New Shell CEO Wael Sawan is sending the right message—that returns will take priority over growth—as he seeks to close the valuation gap with U.S. peers. While it might not be enough, we believe the key actions accompanying the message, including reduced spending and increased distributions, are positive and crucial steps. Also, while the long-term outlook remains uncertain, with most guidance items only covering through 2025, we anticipate that the focus on returns will remain intact beyond then.