BRITISH energy major Shell on Thursday (Oct 31) announced a sharp drop in net profit for the third quarter as it was hit by lower oil prices and weaker refining margins.
Profit after taxation fell to US$4.3 billion in the three months to September, after a net profit of US$7 billion in the same period in 2023, Shell said.
The profit hit related to oil was partly offset by higher gas sales.
Ahead of the earnings release, Shell warned that its refining margins would take a hit, as oil prices have fallen on concerns over Chinese demand and the prospect of higher crude production in 2025.
Shell also announced a fresh buyback of shares worth US$3.5 billion.
Adjusted earnings in Q3 stood at US$6 billion, down slightly from Q2.
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“Shell delivered another set of strong results,” chief executive Wael Sawan said. “We continue to deliver more value with less emissions, while enhancing the resilience of our balance sheet.”
The results were partly weighed down by what the group called an “accounting mismatch”, as well as various costs related to redundancy and restructuring.
At the end of August, Shell announced it was shedding hundreds of jobs from its oil and gas exploration division as part of a cost-cutting programme.
Shell, like rival energy company BP, has backtracked on some climate targets in recent months to the dismay of environmental campaigners, putting more emphasis on oil and gas to boost its profits.
Britain’s BP also reported a drop in its Q3 profits this week, after it too warned of lower refining margins and weak oil trading. AFP
