Shell (LON:SHEL) unveiled quarterly profits $6.3 billion (£4.9b) as it highlighted global investments in gas and LNG.
The firm also plumped for another $3.5bn in share buybacks in the second quarter of the year, as it did in the first quarter.
The firm’s adjusted earnings – its measure of profitability – were down slightly on the first quarter when it wowed analysts with a first-quarter profit of $7.7bn. The results were still a beat as analysts were expecting $5.9bn.
Shell said the quarterly figures reflected “strong operational performance”.
It said it enjoyed cash flow of $13.5bn but that it had paid tax worth $6.1bn. It did not break out how much it paid in the UK under the unpopular Energy Profits Levy, which the UK government has confirmed will increase in November.
However, its thoughts on its investments in the North Sea were likely made clear after it announced the sale of a major chunk of its UK gas fields.
Earlier this week it was revealed Shell had sold off stakes in 11 gas fields in the South North Sea to Viaro.
The energy major did not disclose the value of the deal to sell stakes in the assets which represent around 5% of total UK gas production.
In other areas of the world, the firm highlighted a number of LNG and gas investments in the quarter. It also acknowledged its decision to “pause” work on plans to build a biofuels facility at its refinery in Rotterdam.
It also confirmed it had committed to a final investment decision at a carbon capture in Canada. The Polaris scheme aims to capture approximately 650,000 tonnes of CO2 annually from the Shell-owned Scotford refinery and chemicals complex.
Shell is also a partner in the proposed Acorn CCS project in Peterhead.
Shell said it had stripped $1.7bn of cost from the business since 2022, with $700m cut in the first half 2024. The firm also reported a $1.9bn hit to the value of its assets.
The firm said its plans to spend $22 – 25bn in capex this year was “unchanged”.
Shell CEO Wael Sawan said the firm was “delivering more value with less emissions”.
He said; “Shell delivered another strong quarter of operational and financial results. We further strengthened our leading LNG portfolio, and made good progress across our capital markets day 2023 financial targets, including $1.7 billion of structural cost reductions since 2022.
“Today, we have also announced a further $3.5 billion buyback programme for the next three months. We continue to demonstrate that we are delivering more value with less emissions.”
LNG investment in the quarter included a deal with Singapore’s investment giant Temasek to acquire the LNG-focused Pavilion Energy.
The firm has also agreed to a partnership with UAE-state owned ADNOC in its Ruwais LNG project.
Shell also confirmed taking a final investment decision (FID) in the Manatee gas field in Trinidad.
Panmure Liberium analyst Ashley Kelty said the firm’s results were “above what we expected and better than peers on a relative basis”.
He said: “The pivot back towards core O&G business continues, with Shell announcing a pause in the construction of a biofuel facility in the Netherlands due to poor market conditions.
“The acquisition of a LNG trading business from Temasek and participation in ADNOCs Ruwais LNG project will materially boost company’s presence in this sector.
“We remain positive on the stock, as it has performed better than peers and investors should be cheered by the buyback and divi payout, with the renewed focus on the higher margin segments set to deliver better performance over longer-term.”
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