Big things count for Royal Dutch Shell and the big things are counting against it. Chief executive Ben van Beurden on Thursday said that almost every macro trend from energy prices to economic growth is going against the oil major.

The company churned out about 2.8m barrels a day in the fourth quarter, which is much the same as last year. But while the average price of oil in 2018 was $71, it was $64 in 2019. Gas prices fell, too. Refining and chemicals margins were scrawny. In the fourth quarter, Shell’s returns on capital fell. So did free cash flow and gearing rose when it was supposed to fall. All in all, it was a dismal year. Full-year net income fell 23 per cent.

Oil majors, including BP, have promised to do it all — gush out more black gloop, move to environmentally friendly fuel, cut debt and keep increasing payouts to shareholders. Between them, BP and Shell account for a fifth of FTSE 100 dividends.

But Mr Van Beurden can’t do it all. He has limited levers to pull if Shell is to remain on the course he has set. To meet the group’s desired gearing and buyback targets, the oil price needs to top $65 a barrel. Trouble is, it is now $59.

So capex is being held back. The group has also reduced buybacks this quarter to about $1bn to relieve the balance sheet. That is below expectations and puts in doubt hopes Shell will be able to return $10bn in buybacks by the end of the year.

The market has and will continue to grump at that. But the cash yield of about 8.5 per cent should create a floor for Shell’s shares.

Their long-term performance is a testament to the power of hunkering down. Total returns — dividends and capital — have outperformed fellow oil majors across the world by 39 per cent in the past decade.

Shell is not a gusher, but it is a keeper.

The woman from the Pru

The UK arm of a Spanish bank was always too small a canvas for Shriti Vadera, uber-influencer of financial services policy, writes Cat Rutter Pooley.

A career spent behind the scenes is coming to an end. With her appointment as chair of Prudential, Baroness Vadera steps into the limelight — and the glare of Chinese regulators, where the Pru’s hopes for growth lie.

Right-hand woman to Gordon Brown through the financial crisis, the woman the civil service dubbed “Shriti the shriek” for her management style has shed the nickname during five years as chair of Santander UK.

But she proved no less forceful there. Despite leading a domestic retail bank with minimal Brexit exposure, she nonetheless had more success in steering financial services Brexit policy than any other City lobbyist.

Baroness Vadera spoke truth to power, even if it hurt.

She replaces Paul Manduca, who mastered the art of speaking to power. That might have helped in China and has certainly done the Pru’s share price no harm.

Baroness Vadera has shown equal pragmatism. Santander’s British ambitions had run their course. Last year, the bank wrote down the value of the business by €1.5bn. Having been passed over for the Bank of England governorship, and with hours to the Brexit deadline, she has landed one of the City’s few Brexit-proof jobs. Her first task is to work out which countries the Pru must exit.

Shorn of its UK arm, M&G, the Pru’s only link to Britain is its headquarters and stock market listing. Shareholders can be stubborn about such things, as Unilever found out. The logic for remaining in the UK is tenuous.

Investors are keen to cut loose the Pru’s slower-growing US division, though flogging that business at a decent price will prove difficult. Tellingly, her canned quote that the Pru used to announce her appointment happily anticipated the insurer’s focus on Asian growth. It makes no mention of the US.

That leaves open the question of whether she should retire Mike Wells, allowing the chief executive to spend more time with his ranch. The Pru gives the baroness plenty of canvas on which to exercise her truth-telling talents.

Little love lost for BT

Who loves BT?

Not the government, which has set a cap on Huawei equipment and thereby loaded BT with £500m of extra costs.

Not customers, who ranked the company third from the bottom of the broadband rankings, according to consumer group Which?

Not the regulator, which is haggling with BT over the funding of extending fibre-optic broadband coverage across the UK.

Not shareholders, who know a dividend cut is coming. Just not when.

Not the market, which marked the shares down 7 per cent on Thursday. The shares have halved in three years.

Ah, stockbrokers love it. Fourteen of about 20 analysts rate it a buy.

Cat.rutterpooley@ft.com

Kate.burgess@ft.com

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