British oil major Shell has posted a $6.2 billion profit for the third quarter 2023. This is in line with expectations, as the business benefited from higher oil prices and refining profits. Shell also announced a $3.5 billion buyback program. This is the company’s largest buyback program since 2007.
Profit was up from the second quarter’s $5.1 billion, but down from the $9.45 billion reported a year earlier when the Russia-Ukraine conflict boosted oil and gas prices.
The share buyback will be spread over the following three months.
Wael Sawan, Shell CEO, said that the $6.5 billion budgeted for the second half of the year was “well in excess” of the $5 billion declared in June.
“Shell delivered another quarter of strong operational and financial performance, capturing opportunities in volatile commodity markets,” Sawan said in a statement.
Free cash flow declined from $12.1 billion in the second quarter to $7.5 billion in the third quarter. The amount spent on cash capital expenditure increased from $5.1 billion to $5.6 billion.
Energy companies are coming off a record-breaking earnings year, fueled by skyrocketing fossil fuel prices.
Oil prices have risen dramatically again during the third quarter of 2023, owing to causes such as Saudi Arabian and Russian production cuts, while the International Energy Agency has stated that oil markets would remain volatile due to the intensification of violence in the Middle East.
BP reported a year-on-year drop in third-quarter profit from $8.15 billion to $3.293 billion on Tuesday, falling short of analyst expectations, albeit France’s TotalEnergies slightly exceeded last week.
Shell reported stable performance in its integrated gas operation and highlighted favourable trading, while BP blamed its lacklustre quarterly performance in part on weaknesses in gas marketing and trading.
Meanwhile, Shell’s division for energy solutions and renewables recorded a $67 million loss, which it blamed to decreased trade and weaker margins brought on by seasonal impacts. The amount spent on capital was $659 million.
The company’s decarbonisation effort has drawn criticism for its rapid pace, even from some of its own stockholders.
Last Monday, Shell made it official that it will eliminate 200 jobs from its low-carbon solutions division by 2024.