Shell posts stronger-than-expected profit as gas offsets lower refining margins
The oil and gas giant beat analysts’ forecasts by more than 12% as its integrated gas business surged in the third quarter.
Shell’s earnings comfortably beat market expectations last quarter as higher volumes at its integrated gas business helped offset a slump in refining margins and lower oil prices.
The oil and gas giant said adjusted earnings were 6.03 billion US dollars (£4.64 billion), down 3.1% from 6.22 billion dollars (£4.79 billion) during the same period last year.
The figure beat a company-provided analyst consensus of 5.36 billion dollars (£4.13 billion), and Shell confirmed plans for further returns to shareholders via dividends.
Total production at Shell’s integrated gas business was 941 thousands barrels of oil per day (boe/d), down on the last quarter but up 4.5% on the same period last year.
Integrated gas has been a growing focus for chief executive Wael Sawan, who has carried out a cost-cutting programme at the company and reduced its focus on renewables.
That included job cuts at two business units responsible for Shell’s exploration strategy and for developing its oil and gas finds, which saw 20% of their staff axed, according to reports earlier this year.
The strong integrated gas performance offset a fall in refining margins, which have proven a headache for energy majors of late.
Earlier this week, BP revealed that its third-quarter profits plunged by nearly a third after margins tumbled.
Shell said earnings were also pushed down by charges relating to redundancies and restructuring.
