Oil major Shell has announced it expects to generate between $6-7billion in annual organic free cash flow for its downstream business by 2020.
The forecast comes at the prediction of $60 per barrel oil, adding it expects the business to generate between $9-12billion per year by 2025.
Shell’s downstream business has proved crucial in recent years, providing most of its profits since the oil price downturn in 2014.
The business involves marketing, refining, trading, and chemicals.
Chief Executive Ben van Beurden said: ““Our unique Downstream business is fundamental to delivering a world-class investment case.
““Its unparalleled breadth, depth and the strength of our brand make our
“Downstream business highly competitive, helping to generate strong free cash flows and returns, while making Shell more resilient over the coming decades.”
The company says downstream will help it thrive through the energy transition to low-carbon, and plans to invest between $7-9billion a year across the business.
Shell expects to deliver a return on average capital employed of more than 15 percent.
John Abbott, downstream director, said: “Downstream is helping Shell to thrive during the global shift to a lower-carbon energy system. As the energy system evolves, our marketing businesses will provide agile platforms for meeting the changing needs of our customers. We are making products from today’s technologies as good as they can be, with better fuels and lubricants.
“We are also helping to deliver tomorrow’s products, services and technologies. From battery-electric vehicle charging to nextgeneration
biofuels; LNG for transport to hydrogen; and smartphone apps that enable more efficient driving. We are also working to reduce emissions from our own operations.”
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