Shell profits explode on high oil prices

0

British energy giant Shell said on Thursday its net profit rose more than fivefold to $18 billion in the second quarter, fueled by the resurgence in oil and gas prices, and rewarded shareholders with another takeover exceptional.

The rise in profits in the three months to June was partly attributable to a reversal of $4.3 billion in writedowns after the company raised its forecast for the oil and gas market.

“We delivered strong financial results,” chief executive Ben van Beurden said alongside the earnings statement.

The London-listed energy major has announced a $6 billion share buyback program, having already returned $8.5 billion to shareholders.

Van Beurden also warned that “with volatile energy markets, economic turmoil and the continued need for action to combat climate change, 2022 continues to present challenges for consumers, government and businesses.”

Shell had rebounded to a profit of $3.4 billion in the second quarter of 2021 after losing $18.1 billion in the same period of 2020 when it took a massive impairment charge in the oil market ravaged by Covid.

However, oil and gas prices have soared this year due to the war in Ukraine and after countries lifted pandemic lockdowns.

Gas prices, which soared in March after Russia launched its invasion of Ukraine, soared again this week after Moscow limited crucial deliveries to Europe in recent days.

Global energy majors are reaping the rewards of soaring global oil and gas prices this year following the war in Ukraine.

French company TotalEnergies said Thursday that net profit more than doubled in the second quarter to 5.7 billion euros ($5.8 billion) from a year earlier.

“The energy sector continues to benefit from the imbalance in supply and demand caused by the crisis in Ukraine,” said Laura Hoy, equity analyst at Hargreaves Lansdown.

Meanwhile, the war in Ukraine has caused an exodus of Western energy companies from Russia.

Earlier this year, Shell reported a first-quarter profit of $7.1 billion, despite a $3.9 billion charge on its withdrawal from Russian operations.

rfj/spm

Share.

Comments are closed.