Oil giant Shell reveals plans to boost dividend as it reports third-quarter earnings

Shell’s logo on an oil storage silo, beyond rail tank cars at the company’s Pernis refinery in Rotterdam, the Netherlands, Sunday October 23, 2022.

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British oil major Shell reported third-quarter profit on Thursday, but lower refining and trading revenue ended its streak of record quarterly profits.

Shell posted adjusted profit of $9.45 billion for the three months to the end of September, meeting analyst expectations of $9.5 billion according to Refinitiv. The company posted an adjusted profit of $4.1 billion in the same period a year earlier and raked in $11.5 billion for the second quarter of 2022.

The oil giant said it plans to increase its dividend per share by around 15% for the fourth quarter of 2022, which will be paid in March 2023. It also announced a new share buyback program, which is expected to be translate into an additional $4 billion. distributions and should be completed by the next publication of its results.

Shares of Shell are up more than 41% since the start of the year.

The London-based oil major posted consecutive quarters of record profits in the first six months of the year, benefiting from soaring commodity prices following Russia’s invasion of Ukraine.

Shell warned in an update earlier this month, however, that falling refining and chemicals margins and weak gas trading were likely to negatively impact third-quarter earnings.

On Thursday, the company said a recovery in global product supply contributed to lower refining margins in the third quarter and gas trading profits also fell.

“Trade and optimization contributions were primarily impacted by a combination of seasonality and supply constraints, coupled with substantial differences between paper and physical realizations in a volatile and dislocated market,” Shell said in a statement. report on its results.

Change of direction

The group’s results come shortly after it was announced that CEO Ben van Beurden would leave at the end of the year after nearly a decade at the helm.

Wael Sawan, currently director of integrated gas, renewables and power solutions at Shell, will become its next chief executive on January 1.

A Lebanese-Canadian national, Sawan has held positions in downstream retail and various commercial projects during his 25-year career with Shell.

“I look forward to harnessing the pioneering spirit and passion of our incredible people to meet the immense challenges and seize the opportunities presented by the energy transition,” Sawan said in a statement Sept. 15, adding that it was about with the honor of following van Beurden’s direction.

“We will be disciplined and value-driven as we work with our customers and partners to deliver the reliable, affordable and cleaner energy the world needs.”

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