Shell reports record quarterly profits as Ukraine war roils energy markets

Shell recorded the highest quarterly earnings ever as it took advantage of volatility in global energy markets following Russia’s invasion of Ukraine.

Adjusted earnings in Europe’s largest oil company rose to $ 9.1 billion in the first three months of the year, nearly three times the $ 3.2 billion it recorded a year earlier.

It surpassed average analyst estimates of $ 8.7 billion and rose from $ 6.4 billion in the last three months of 2021.

Shell’s results complete a series of notable gains in the first quarter of the world’s largest oil and gas companies. BP reported Base profit of $ 6.2 billion this week, the highest since 2008, while state-owned Equinor in Norway recorded its highest quarterly profit before tax of $ 18 billion.

“The war in Ukraine is first and foremost a human tragedy but it has also caused a significant disruption to global energy markets and has shown that safe, reliable and affordable energy simply cannot be taken for granted,” said Shell CEO Ben Van Borden.

Shell’s profits were driven by its combined oil and gas production divisions, which generated coordinated profits of $ 4.1 billion and $ 3.5 billion, respectively, and strong performance by its dealers.

“Favorable trading conditions” means that profits from what he calls trade and optimization were similar to the previous quarter for gas and “significantly higher” for petroleum products. This helped it reduce its net debt to $ 48.5 billion from $ 52.6 billion at the end of last year.

Shell is the world’s largest trader of liquefied natural gas and a major trader in oil. LNG prices, in particular, Went up Since European efforts to reduce dependence on gas in the pipeline from Russia have increased competition for fuel charges. Shell produced 8 million tonnes of LNG in the first quarter and sold 18.3 million tonnes.

Leshel had less exposure to Russia than European rivals BP and Total. Before the war, Russia was expected to contribute 5% of Shell’s total oil and gas production in 2022, compared to 16% for Total and 28% for BP, according to investment bank Jefferies.

Shell’s decision to Sell ​​its business in RussiaIncluding 27.5% of the shares of the Sakhalin-2 liquefied gas project with Gazprom, resulted in post-tax charges of $ 3.9 billion, the company said.

The UK headquarters said it had completed $ 4 billion out of $ 8.5 billion in Repurchases of shares have been announced For the first half of the year and the expected distributions to shareholders in the second half of 2022 will be more than 30% of the cash flow from operations. Cash flow from operations in the first quarter was $ 14.8 billion.

“The bottom line here is that Shel’s continues to generate operating cash flows and free cash flows far beyond any of its peers,” said Biraj Borkhataria, an analyst at RBC Capital Markets.

BP bumper gains this week have led to renewed calls from opposition politicians in the UK Charge wind tax On the profits of oil and gas companies. The huge revenue at Shell will do the same.

As with BP, Shell does not disclose how much of its profits were generated in the UK. Shell was the sixth largest gas producer in the UK’s North Sea last year, according to data from consulting firm Rystad Energy.

Shell reports record quarterly profits as Ukraine war roils energy markets Source link Shell reports record quarterly profits as Ukraine war roils energy markets

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