By Ayomide Otitoju
London, UK – British oil and gas giant Shell reported a 24 percent increase in net profit for the third quarter, as improved trading margins and higher sales volumes offset declining oil prices.
Profit after tax rose to $5.3 billion for the three months ending September, up from $4.3 billion a year earlier, the company said in a statement on Thursday.
“Despite continued volatility, our strong delivery this quarter enables us to commence another $3.5 billion of share buybacks for the next three months,” said CEO Wael Sawan.
Adjusted earnings, excluding exceptional items, fell nearly 10 percent but still exceeded market expectations. The company also reported a reduction in net debt compared to the previous quarter.
Shell had faced profit challenges in the first half of the year amid weaker oil and gas prices, pressured by global economic concerns and increased production from OPEC+ nations.
The company’s upstream division was the main driver of the quarterly profit, benefiting from increased production in Brazil and the Gulf of America, according to Derren Nathan, head of equity research at Hargreaves Lansdown. He also noted gains from gas trading, which typically performs well during volatile periods.
Shell’s share price remained flat in London morning trading.
The report comes amid Shell and rival BP scaling back certain climate targets to focus on oil and gas profitability. In July, Shell launched its liquefied natural gas (LNG) project in Canada, expected to ship 14 million tonnes annually to Asia from British Columbia.
Meanwhile, Shell abandoned plans to construct one of Europe’s largest biofuel plants in the Netherlands last month due to unfavourable market conditions. The facility was intended to produce sustainable aviation fuel and diesel from waste.
French rival TotalEnergies reported a 61 percent jump in third-quarter net profit to $3.7 billion, while Norwegian Equinor fell into a net loss and Spanish Repsol saw a sharp decline in first-nine-month profits.
BP is scheduled to release its third-quarter results next week, following strong second-quarter earnings.
