British oil major Shell on Wednesday announced plans to boost returns to shareholders and keep oil output steady, as part of its strategy to simplify the group’s business and improve investor confidence.

Ahead of its Capital Markets Day conference in New York later in the day, Shell said it would increase shareholder distributions to 30% to 40% of cash flow from operations, up from 20% to 30% previously.

This includes raising the dividend per share by an expected 15% from the second quarter and executing at least $5 billion of share buybacks in the second half of the year.

“Performance, discipline, and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions, while enabling the energy transition,” said Shell CEO Wael Sawan.

“We will invest in the models that work – those with the highest returns that play to our strengths,” added Sawan, who took office at the start of the year after serving as director of the company’s integrated gas, renewables and energy solutions.

Shell’s focus on performance and capital discipline comes as the company seeks to close what many see as the growing gap in valuations between European and U.S. oil majors. The British oil major reported a record annual profit of nearly $40 billion for 2022.

The firm on Wednesday announced capital spending will be reduced to $22 billion to $25 billion per year for 2024 and 2025, respectively.

Shares of Shell were up 1.5% on Wednesday. The firm’s London-listed stock price is marginally lower year-to-date.

Shell said it would maintain oil production at current levels through to the end of the decade as part of a bid to generate more cash from its oil division. It simultaneously reiterated its commitment to climate targets, saying it was making “good progress” toward becoming a net-zero business by 2050.

The company will also seek to grow its integrated gas business while maintaining leadership in the global liquefied natural gas market.

The burning of fossil fuels, such as oil, gas and coal, is the chief driver of the climate emergency. Shell’s decision to refrain from new oil output cuts drew criticism from activist shareholder group Follow This.

Mark van Baal, founder of Follow This, on Wednesday said Shell’s growth in fossil fuels puts the company “on a collision course” with the 2015 Paris Agreement, noting the landmark climate accord calls for a halving of carbon emissions by 2030.

“The new CEO Wael Sawan would not dare to grow Shell’s fossil fuel business if more institutional investors had voted in favour of the Follow This climate resolution requesting Paris-aligned targets,” he added.

At the Shell shareholder meeting last month, support for a Follow This resolution demanding tougher emission reduction targets by the end of the decade came in at 20%. “Shell still has to answer these 20%,” van Baal said.

The Shell annual general meeting was repeatedly disrupted by protesters last month, reflecting a palpable sense of frustration during the Big Oil proxy voting season.

The world’s leading climate scientists have previously warned that the fight to keep global heating under 1.5 degrees Celsius has reached “now or never” territory, saying last year that “any further delay in concerted global action will miss a brief and rapidly closing window to secure a liveable future.”