Shell's $6 billion profit beats expectations as LNG offsets a weak refining sector

Shell announced on Thursday that it had exceeded the forecasted profits for the third quarter by 12%. This was due to higher LNG sales, which offset lower oil refining results and weaker trading results.

Oil prices dropped by 17% during the third quarter, despite the fact that global refining margins fell sharply due to a weaker economy and the opening of new refineries across Asia and Africa.

The company announced that it would buy back an additional $3.5 billion in its shares within the next three-month period, at the same rate as the previous quarter. The company's dividend remains unchanged at 34 cents a share.

Shell's adjusted earnings, which is its definition of net income, exceeded analyst expectations by a large margin. However, they were down 3% compared to a year ago.

Shell, the top global trader in liquefied gas, has reported LNG sales of 17.4 million metric tonnes, up from 16.4 mtpa the previous quarter. This helped boost the division's earnings by 4%.

The oil and gas division's earnings rose 5%, while production grew 2%.

The strong performance in upstream and LNG helped offset a 57% decline in earnings in the division of refining and chemical products, where margins on converting crude oil to fuels fell sharply. Shell also reported a decline in oil trading.

British rival BP reported a 30% decline in its third-quarter profits to $2.3 billion on Tuesday, the lowest profit in nearly four years. This was due to weaker refining, and oil trading.

Sawan, who assumed office in January 2023 has pledged to boost the performance of the company by the end 2025, and focus on the most lucrative businesses, including oil, gas, and biofuels.

(source: Reuters)