Shell ups dividend despite profit slump, lower LNG sales

The Hague-based energy giant Shell logged a 9 percent decline in its LNG sales during the third quarter of this year as it reported better-than-expected adjusted earnings. It also said it would raise its dividend to shareholders by around 4%.

The firm reported adjusted earnings of $955 million for the quarter beating analyst estimates but still down 80 percent year-on-year due to the effects related to the Covid-19 pandemic.

Shell attributed the decline to lower realised oil and LNG prices as well as lower realised refining margins and production volumes compared with the third quarter last year.

Shell also announced a dividend per share growth by around 4% to 16.65 US cents for the third quarter 2020 and annually thereafter.

This comes just six months after cutting its dividend for the first time since the second world war. At the same time, Shell said earlier this year it plans to slash up to 9,000 job due to the oil and gas market slump and as part of a major overhaul to shift to low-carbon energy.

Shell’s CEO Ben van Beurden said “sector-leading” cash flows will enable the firm to grow its businesses of the future while increasing shareholder distributions, making Shell a “compelling investment case.”

“We must continue to strengthen the financial resilience of our portfolio as we make the transition to become a net-zero emissions energy business,” he said.

“The strength of our performance gives us the confidence to lay out our strategic direction, resume dividend growth and to provide clarity on the cash allocation framework, with clear parameters to increase shareholder distributions,” van Beurden said.

Both LNG volumes and sales down

Shell sold 17.13 million tonnes of LNG in the July-September period, compared to 18.90 million tonnes in the same period last year.

Liquefaction volumes also decreased 13 percent year-on-year to 7.80 million tonnes “mainly as a result of more maintenance activities in Australia”, Shell said.

In the January-September period, LNG sales dropped 3 percent to 52.78 million tonnes while liquefaction volumes decreased 5 percent to 25.03 million tonnes.

Shell’s Integrated Gas segment recorded a loss of $151 billion hit by impairments and lower realised LNG, oil and gas prices.

This included an impairment charge of $924 million mainly related to the Prelude floating LNG operations in Australia.

To remind, Shell said earlier this month it will not restart production at its giant Prelude FLNG facility offshore Western Australia before the next year.

Shell hasn’t exported any cargoes from the FLNG for more than nine months following an electrical trip on February 2.

Most Popular

Excelerate in $700 million senior notes offering

US FSRU player Excelerate Energy aims to raise about $700 million via an offering of unsecured senior notes due 2030.

Adnoc, ENN seal 15-year LNG SPA

UAE’s Adnoc has signed a 15-year sales and purchase agreement with Chinese independent gas distributor ENN to supply the latter with LNG from its LNG terminal in Al Ruwais.

LNG shipping rates continue to decrease

Spot LNG freight shipping rates in both basins continued to decrease this week, while European prices increased compared to last week.

More News Like This

Venture Global launches Calcasieu Pass LNG commercial ops

US LNG exporter Venture Global LNG has launched commercial operations at its Calcasieu Pass LNG terminal in Louisiana, some 68 months from its final investment decision and 38 months after production start.

YPF expects more supermajors to join Argentina LNG project, CEO says

Argentina’s state-owned oil and gas company YPF expects more supermajors to become equity partners in the planned Argentina LNG project following a deal with Shell, according to CEO Horacio Marin.

Shell expects Q1 LNG trading results to be in line compared to previous quarter

LNG giant Shell expects trading and optimization results for its integrated gas business in the first quarter of this year to be in line compared with the fourth quarter of last year.

Peru LNG terminal sent five shipments in March

Peru LNG’s liquefaction plant at Pampa Melchorita has shipped five liquefied natural gas cargoes in March, one more than in the previous month.