Shell Chooses Share Buybacks Over Bidding for BP

Despite a 28% drop in Q1 profits, Shell remains committed to its $3.5 billion quarterly buyback program.

Shell CEO Prioritizes Internal Investment Over Acquisitions

Shell CEO Wael Sawan has made it clear that the company prefers to invest in itself rather than pursue a takeover of rival BP. Speaking to the Financial Times, Sawan said, “We’ll always consider opportunities, but we also evaluate alternatives. Right now, buying back Shell shares remains the right alternative for us.”

Speculation has surrounded a potential Shell bid for BP after BP’s stock fell 32% over the past year. Activist hedge fund Elliott Management, which owns a 5% stake in BP, has warned the company could face a takeover unless it makes deeper cuts to costs and spending.

Continued Buybacks Despite Profit Drop

Sawan’s comments came as Shell released its Q1 earnings report, announcing a $3.5 billion share buyback for the quarter. This marks the 14th consecutive quarter Shell has spent over $3 billion to reduce its outstanding shares.

Shell reported adjusted earnings of $5.6 billion for Q1—down 28% from the same period last year, but around 10% above analyst expectations. Shares rose more than 2.5% Friday morning following the results.

Well-Positioned for Oil Price Volatility

Sawan said Shell is well-prepared for lower oil prices in the months ahead. Brent crude fell to $63 per barrel on Friday, down from $76 at the start of the year, amid global economic concerns and rising supply from OPEC members.

“The balance sheet is in the best shape it has been in a decade,” Sawan noted, highlighting Shell’s leverage ratio of under 19%, or just 7% excluding lease obligations. “That’s not a bad place to be heading into some choppy weather,” he added.

Confident in Payouts Even with Lower Oil Prices

Sawan reaffirmed Shell’s ability to maintain its dividend—36 cents per share in Q1—and said the company could continue buying back $6–7 billion of stock annually even if oil prices drop to $50 per barrel. “The last two years have been about becoming leaner and stronger,” he said. “We’ve taken the steps to prepare for a potentially softer environment, and our plan remains unchanged.”

Conclusion

As competitors like BP face shareholder pressure and market volatility, Shell is doubling down on stability and shareholder returns—favoring internal strength over aggressive expansion.

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