LNG giant Shell reported a drop in its adjusted earnings in the third quarter, while its LNG sales rose compared to the same period in the year before.
The firm said its adjusted earnings reached $6.22 billion in the quarter, a drop of 34.2 percent compared to $9.45 billion in the year before. Adjusted earnings rose by 23 percent compared to $5.07 billion in the prior quarter.
Income attributable to Shell shareholders was $7.04 billion, a rise compared with $6.74 billion in the third quarter last year and $3.13 billion in the previous quarter.
Compared to the prior quarter, income attributable to Shell shareholders mainly reflected higher refining margins, higher realized oil prices, higher LNG trading and optimization results, and higher upstream production, partly offset by lower integrated gas volumes, Shell said in the report.
Cash flow from operating activities for the third quarter was $12.3 billion.
CEO Wael Sawan said Shell “delivered another quarter of strong operational and financial performance, capturing opportunities in volatile commodity markets.”
He said that Shell is starting a $3.5 billion buyback program for the next three months, bringing the buybacks for the second half of 2023 to $6.5 billion, “well in excess of the $5 billion announced at Capital Markets Day in June.”
This takes total announced shareholder distributions for 2023 to about $23 billion, Sawan added.
LNG sales rise, liquefaction volumes down
Shell sold 16.01 million tonnes of LNG in the July-September period, a rise of 2.2 percent when compared to 15.66 million tonnes in the same period last year.
Sales dropped slightly compared to 16.03 million tonnes in the prior quarter.
Liquefaction volumes dropped to 6.88 million tonnes in the third quarter compared to 7.24 million tonnes in the same quarter last year and also compared to 7.17 million tonnes in the prior quarter.
Shell said liquefaction volumes decreased by 4 percent compared to the prior quarter mainly due to higher maintenance at Prelude FLNG.
During the January-September period, Shell’s LNG sales dropped slightly to 49.01 million tonnes from 49.16 million tonnes in 2022, while liquefaction volumes decreased by 7 percent to 21.23 million tonnes.
The firm expects liquefaction volumes to reach about 6.7 – 7.3 million tonnes in the fourth quarter and the outlook reflects ongoing maintenance at Prelude and lower expected liquefaction volumes from Egypt.
Total oil and gas production, compared with the second quarter 2023, decreased by 9 percent to 900,000 barrels of oil equivalent per day mainly due to higher planned maintenance at Prelude, in Trinidad and Tobago, and production-sharing contract effects in Pearl GTL, Shell said.
Integrated gas earnings
The company’s integrated gas segment reported adjusted earnings of about $2.53 billion in the third quarter.
This compares to $2.32 billion in the same period a year ago and $2.5 billion in the prior quarter.
Segment earnings of $2.15 billion dropped compared to $5.74 billion in the same quarter last year but they rose from $754 million in the prior quarter.
Compared with the prior quarter, integrated gas earnings reflected the combined effect of higher contributions from trading and optimization and higher realized prices from liquid products, partly offset by lower volumes, Shell said.
Shell announced last month that it was expecting higher trading and optimization results for its integrated gas business in the third quarter of this year compared to the previous quarter.