Sunday 25 August 2019

Shell profits rise on recovering oil prices

Shell Chief Executive Ben van Beurden Photo: Bloomberg
Shell Chief Executive Ben van Beurden Photo: Bloomberg

Ravender Sembhy

Royal Dutch Shell has reported a large rise in third-quarter profits after the energy giant was boosted by higher oil prices and increased production.

The firm said adjusted earnings rose 47pc to $4.1bn in the period as chief executive Ben van Beurden hailed a "strong set of results".

It comes as the price of crude rose above $60 per barrel this week, its highest price for five months.

Shell said that it benefited from stronger refining and chemicals industry conditions, increased oil and gas prices and higher production from new fields.

Total production rose 2pc to 3.7 million barrels a day in the quarter.

Shell's upstream oil and gas producing unit booked an increase in earnings from $4m to $562m while downstream profit grew from $2.1bn to $2.7bn.

Mr van Beurden added: "Shell's three businesses all made resilient contributions to this strong set of results.

"Upstream generated almost half of the $10bn cash flow from operations excluding working capital this quarter, at an average Brent oil price of $52 per barrel, and this was complemented by good cash contributions from our growing Integrated Gas business and from Downstream.

"This competitive performance is further evidence of Shell's growing momentum, and strengthens my firm belief that our strategy is working."

Shell is also embarking on an ambitious cost-cutting drive and a $30bn divestment initiative.

To this end, the oil major offloaded $187m of upstream and $1.15bn of downstream assets in the quarter, including a 50pc share in SADAF, the petrochemicals joint venture in Saudi Arabia.

Shell also announced this week that it has completed the sale of a package of North Sea assets for up to $3.8bn to smaller rival Chrysaor.

PA Media

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