British oil major Shell reported its earnings more than doubled this quarter, but profits in refining and trading incurred. No record of earnings has been made in recent years.
By the 3rd Quarter, Shell stocks had risen to $88.98, an increase of 1.3333 per cent from Q2’s share price of $87.73. The company has posted gross earnings of $4.1 billion over the same time last year and recorded a staggering $11.5 billion in the second quarter of 2020.
The oil company has announced that it has raised their dividend 15% for the 2020 fourth quarter, which will result in a payout in March 2023. The company also announced a share buyback program that will result in an additional $4 billion of distributions and is expected to be completed by its next earnings release.
Shares of Shell rose by 3% during morning deals in London. The company’s stock price is up 42% year-to-date.
London-based ExxonMobil reported consecutive quarters of record profits through the first six months of the year. The oil major is reaping the benefits from surging commodity prices due to world events, like Russia’s invasion in Ukraine.
Due to the current cost-of-living crisis in Britain, people are now asking for higher taxes on the high profits of Britain’s biggest oil and gas companies. This has come at a time when the country seems to be in trouble.
With the third quarter coming to a close and lower refining and chemical margins, Shell is warning that weak gas trading will likely negatively affect their earnings.
On Thursday the company said a recovery in global product supply had contributed to lower refining margins in the third quarter, and gas trading earnings had also fallen.
“The trading and optimisation contributions were mainly impacted by a combination of seasonality and supply constraints, coupled with substantial differences between paper and physical realisations in a volatile and dislocated market,” The company said in their earnings release.
What about investing for more sustainable purposes?
“Shell invests in the future to grow its portfolio and meet customer needs for both short-term and long-term solutions. We also actively work with governments and consumers to ensure their energy needs are met,”
In the first nine months of the year, Shell’s investments in its “Renewables & Energy Solutions” sector totaled around $2.4 million–roughly 14% of its total cash capital expenditures of $17.5 million.
Shell is investing in renewable energy solutions, natural gas, and other fossil fuels.
“You can’t claim to be in transition if less than 14% of your investments is going to new and renewable energy businesses and at least 86% of your investments remains tied to old, fossil fuel businesses,” van Baal said.
Whilst the company does make public what they invest in renewables, there isn’t really a clear breakdown of how much are actually outlined.
Speaking to Reuters, Van Baal said “We still don’t see Shell using this once-in-a-lifetime opportunity to invest in diversification and ensuring the future of the company,”
Wael Sawan, who at the moment is Shell’s director of integrated gas, renewables and energy solutions will take on a new role as chief executive on Jan. 1 succeeding Ben van Beurden who left because of “personal reasons”.
Sawan was born in Lebanon and grew up in Toronto. He went on to work for companies like Shell and other commercial projects during the course of his career.
“I’m looking forward to taking on the many challenges and seizing any opportunities that come with the transition towards a low-carbon world, as we channelled our passionate energy from generation to generation,” Sawan said in a statement on Sept. 15″
“We will be disciplined and value focused, as we work with our customers and partners to deliver the reliable, affordable and cleaner energy the world needs.”
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