Shell Plc said its gas trading revenues in the last three months of 2022 had “substantially increased”. This is because the division previously run by the company’s new boss has overcome some of the challenges it faced earlier this year.
An update released on Friday suggests the company may avoid a repeat of what happened in the third quarter. At this time, Shell’s peers were far more successful in profiting from record gas prices in Europe.
Still, the overall impact on the energy giant’s earnings remains uncertain amid the downward trend in energy prices. Earlier this week, Exxon’s Mobil said fourth-quarter earnings were hit by about $3.7 billion due to weakening oil and gas.
“Investors are probably a little bit more comfortable with consolidated gas deals,” said Viraj Volkataria, an analyst at RBC Capital Markets. “We had a poor last quarter, but they insisted it wasn’t structural. So it’s good to see good numbers coming out on that front.”
Shell shares rose 1.7% in London.
The fluctuating performance highlights the opportunities and challenges ahead for CEO Wael Sawan, who took over the top role just days ago. Shell and its peers enjoyed huge cash inflows last year, and whether this continues will be important in determining the company’s ability to invest in cleaner energy while continuing to increase returns for shareholders. will be an important element.
But as the world grapples with the effects of the ongoing Russian war in Ukraine, a slowing global economy and China’s efforts to lift Covid-19 restrictions, this year could prove to be another volatile year for energy markets. there is. Oil prices have fallen more than 40% from their 2022 peak, but mild weather has sent European natural gas prices plummeting to pre-invasion levels.
There is also a continuing risk of further government intervention in the energy market. Shell said it faces claims totaling $2.4 billion in 2022 from contingent tax measures in the UK and European Union.
Shell’s fourth quarter liquefied natural gas production was between 6.6 and 7 million tonnes, down from 7.2 million tonnes in the previous quarter, due to problems at Australia’s Prelude and QGC projects.
The company’s benchmark refining margins rose about 27% from the previous quarter to $19 a barrel. Chemicals margins also recovered to $37 per tonne after turning negative in the third quarter.
