Shell seeing profit shift from oil to natural gas

The energy giant's oil division is expected to post a third-quarter loss due to production problems in several locations.

Royal Dutch Shell will post “significantly higher” earnings from its natural gas trading division despite supply disruptions to its sprawling portfolio, but its oil unit fared worse.

Shell has a huge portfolio of gas supplied by pipeline or carried in its liquefied form by ocean-going vessels. However, its earnings from the fuel fell short in the third quarter due to production problems in several locations. 

The company overcame “ongoing supply issues” to make the most of high prices from liquefied natural gas.

However, results from its oil trading and refining unit were weaker, with the division expected to post a loss. Oil trading results were “significantly lower” from the third quarter and realised refining margins were hit by extended maintenance at its Scotford refinery and the impact of Hurricane Ida.

Brent crude oil was up slightly at around $80 per barrel.

Shell also promised to buy back $5.5bn of shares “at pace” using the proceeds from asset sales. 

The share repurchases, first announced last year and funded from the sale of its Permian-basin oil assets in the US, was approved by Shell’s board on December 31. 

The company did not then give a specific timeline and said it would disclose more details when it publishes its earnings early next month.

Bloomberg