Shell Plc has said that it expects higher earnings from gas trading in the fourth quarter of 2023.
This upward trend is attributed to seasonal market dynamics and increased production of liquefied natural gas (LNG), a crucial contributor to recent profitability.
However, the company anticipates lower profits from its chemicals and oil products division during the same period. Shell projects a loss for this segment, highlighting a shift in earnings composition for the quarter.
Market expectations
According to the Bloomberg report, it’s noteworthy that Shell’s overall earnings in the previous quarter met market expectations, despite mixed results for the oil major sector as a whole.
This consistent performance aligns with Shell’s accelerated share buyback program and CEO Wael Sawan’s pledge to prioritize shareholder returns.
The full Q4 results are slated for release on February 1st, 2024, providing further insights into Shell’s financial performance and strategic direction.
Shell’s gas trading division has proved to be a major moneymaker since Russia’s invasion of Ukraine increased volatility in the price of the fuel.
The company narrowed its production range for gas to 880,000 to 920,000 barrels equivalent of oil a day and increased the lower end of its liquefaction forecasts to 6.9 million tons from 6.7 million previously.
The report noted that trading and optimization from Shell’s chemicals and oil products division “is expected to be significantly lower” than in the previous quarter. The company also narrowed its forecast range for upstream production volumes to 1.83 million to 1.93 million barrels a day.
What You Should Know
Nigeria’s Supreme Court recently upheld an appeal by Shell Plc’s local unit against a ruling related to a pollution case that’s prevented the oil major from selling billions of dollars of assets in the country, people with knowledge of the matter said.
Shell Petroleum Development Co. of Nigeria Ltd. was issued a court order in 2022 preventing it from divesting the assets pending the outcome of the case. Its parent company subsequently paused the disposal of its onshore oil operations.
Full details of the judgment, which was issued verbally on Friday, will be set out in writing in seven days, the people said, asking not to be named before the ruling was published. SPDC holds 30% of a joint venture in Nigeria, with the state oil company among other shareholders.
- “We note the Supreme Court’s judgment on SPDC’s appeal,” a spokesperson for the unit said in response to questions. SPDC is “currently assessing its implications.”
Mohammed Ndarani Mohammed, a lawyer representing the plaintiffs, said he would read the ruling before deciding whether to comment.
Shell has pumped oil in Nigeria for more than half a century. But almost three years ago, then-Chief Executive Officer Ben van Beurden signalled its intention to exit onshore oil positions as a result of persistent sabotage and theft, while staying committed to offshore gas assets.