Shell accelerates pace of share buybacks as profit rises

The oil and gas giant said it would repurchase €3.3bn of shares over the next three months, an increase from €2.83bn in the prior period

The company had already highlighted its strong performance in natural gas trading in the third quarter, which offset lower production.

Shell Plc accelerated the pace of share buybacks as third-quarter profit rose on a combination of higher energy prices, strong gas trading and wider refining margins.

The company’s performance, which matched analyst expectations, caps a mixed earnings season for Big Oil. The US majors fell short of estimates, taking some of the shine off recent takeover deals, while their European peers mostly did better than expected.

“Shell delivered another quarter of strong operational and financial performance,” Chief Executive Officer Wael Sawan said in a statement on Thursday. Total buybacks of $6.5bn (€6.13bn) in the second half are “well in excess” of the $5bn (€4.71bn) pledged in June, he said.

Shell’s adjusted net income from July to September was $6.22bn (€5.86bn), an increase of 23% from the prior quarter but down about a third from a year earlier, according to the statement. The London-based oil and gas giant said it would repurchase $3.5bn (€3.3bn) of shares over the next three months, an increase from $3bn (€2.83bn) in the prior period.

The company had already highlighted its strong performance in natural gas trading in the third quarter, which offset lower production. Total oil and gas output was down 9% from the preceding three months, reflecting higher levels of planned maintenance at the Prelude liquefied natural gas facility in Australia and works in Trinidad and Tobago.

Maintenance at Prelude and lower volumes from Egypt will continue to have an impact on LNG output until the end of the year, Shell said.

The oil majors’ growth strategies are in the spotlight after Exxon Mobil and Chevron agreed a pair of takeovers last month together worth more than $100bn (€94.23bn). 

While the CEOs of BP, TotalEnergies and Eni have all rebuffed suggestions that they need to follow the example of their dealmaking American rivals, Shell’s Sawan may face similar questions when he faces analysts later on Thursday.