Energy giant Shell announces rise in profits

Energy giant Shell announces rise in profits
by AFP Staff Writers
London (AFP) Nov 2, 2023

British energy giant Shell on Thursday said net profit rose 4.5 percent to $7 billion in the third quarter from a year earlier, as it benefits from high oil prices.

"Shell delivered another quarter of strong operational and financial performance, capturing opportunities in volatile commodity markets," chief executive Wael Sawan said in a statement.

"We continue to simplify our portfolio while delivering more value with less emissions," he added in an earnings statement.

Energy majors are benefiting in the current fourth quarter from elevated oil prices, which are being fuelled by concerns the Israel-Hamas conflict could widen across the crude-rich Middle East.

Shell on Thursday also announced a fresh buyback of shares worth $3.5 billion.

Adjusted earnings in the third quarter stood at $6.2 billion, up compared with the second quarter, on "robust operational performance and higher oil prices and refining margins".

Over the first nine months of 2023, Shell's profit was however down sharply, reflecting lower oil prices year-on-year.

Crude futures had soared at the start of 2022 following the invasion of Ukraine by major oil producer Russia.

After later falling somewhat, they are once more on the rise thanks also to output cuts by Saudi Arabia and Russia, the main players in the OPEC+ oil-producing cartel.

"Higher oil prices have coincided conveniently for Shell with a three-percent increase in production..., reaching the equivalent of 1.75 million barrels of oil a day," Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted Thursday.

Following its update, Shell's share price rose 1.54 percent to almost 27 pounds ($33) on London's benchmark FTSE 100 index, which was rising 1.2 percent overall.

"Shell is still flirting with an all-time high in its share price, with the decision by CEO Wael Sawan to refocus on the hydrocarbons business, while pivoting more slowly to renewables," Streeter added.

As expected, Shell's latest bumper profits drew the ire of environmentalists.

"People are sick of watching oil bosses feign concern about the planet while slashing jobs and investment in renewables and ploughing money into dividends, share buybacks, and new fossil fuel projects," Charlie Kronick, senior climate advisor at Greenpeace UK, said in reaction to the company's results.

Shell in June said it planned to keep oil output steady until 2030, while maintaining that its overall goal to achieve net zero carbon emissions by 2050 remains intact.

Meanwhile last month, Qatar agreed to supply Shell with natural gas for 27 years.

Shell rival BP on Tuesday posted net profit totalling $4.9 billion for the third quarter.