Shell on Thursday became the latest oil major to report first-quarter earnings above expectations and announced additional share repurchases of $4 billion.
Shell booked adjusted earnings of $9.6 billion for the first quarter of 2023, well above expectations of $8 billion. The profit was slightly down from the Q4 earnings of $9.8 billion but above the $9.1 billion for the same period last year, when oil and gas prices surged following the Russian invasion of Ukraine in February 2022.
The Q1 2023 adjusted earnings were driven by “strong trading and optimisation margins for gas and power due to continued price volatility primarily in European and American markets,” Shell said.
Shell plc Chief Executive Officer, Wael Sawan, commented,
“In Q1 Shell delivered strong results and robust operational performance, against a backdrop of ongoing volatility, while continuing to provide vital supplies of secure energy.”
“We will commence a $4 billion share buyback programme for the next three months as part of our commitment to deliver attractive shareholder returns.”
The new share buyback, expected to be completed by the Q2 2023 results announcement, would bring total shareholder distributions to around $12 billion for the first half of 2023, Shell said.
“While it was widely expected that today’s Q1 profits would see a modest slowdown, they have come in much better than expected at $9.6bn, only a modest decline from Q4’s $9.8bn, on revenues of $86.96bn,” Michael Hewson, chief market analyst at CMC Markets, said, commenting on Shell’s bumper Q1 profits.
After the Q1 results were released, shares in Shell surged by 3% at opening on the London Stock Exchange.
All other European majors, including BP, TotalEnergies, and Equinor, have also reported strong earnings from trading and marketing of crude oil, oil products, and natural gas.
Despite the decline in oil and gas prices between January and March this year, all of Big Oil, including U.S. supermajors ExxonMobil and Chevron, reported first-quarter earnings beating analyst estimates, thanks to higher production, strong trading results, and still relatively high refining margins.
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By Tsvetana Paraskova for Oilprice.com
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