Shell 3Q CCS earnings dip 15%

Oil and gas giant Shell’s current cost of supply earnings, excluding identified items, in the third quarter of 2019 fell 15 percent. CCS income was ~$4,8 billion, down from ~$5,6 billion a year ago. The third-quarter revenue was $86,6 billion, down from $100,1 billion a year ago.

Shell on Thursday said that compared with the third quarter 2018, CCS earnings attributable to shareholders excluding identified items were $4.8 billion, reflecting lower realized oil, LNG and gas prices, as well as weaker, realized refining and chemical margins. This was partly offset by significantly stronger contributions from LNG and oil products trading and optimization as well as higher realized margins in retail and global commerce, Shell said.

Upstream business earnings – which were to $1,7 billion in 3Q 2019, down from $2,2 billion a year ago – recorded a gain on sale of assets of $1,46 billion, but were offset in part by impairment of $344 million and a charge of $261 million related to the impact of the weakening Brazilian real on a deferred tax position.

During the quarter, Shell completed the sale of its shares in Shell Olie-og Gasudvinding Danmark B.V., which held a 36.8% non-operating interest in the Danish Underground Consortium, to Norwegian Energy Company ASA for $1.9 billion.

Shell CEO Ben van Beurden commented: “This quarter we continued to deliver strong cash flow and earnings, despite sustained lower oil and gas prices and chemicals margins. Our earnings reflect the resilience of our market-facing businesses and their ability to capitalize on market conditions, including very strong trading and optimization results this quarter.

“Our intention to buy back $25 billion in shares and reduce net debt remains unchanged. The prevailing weak macroeconomic conditions and challenging outlook inevitably create uncertainty about the pace of reducing gearing to 25% and completing the share buyback program within the 2020 timeframe.”

Shell’s total oil and gas production in the quarter fell one percent to 3,56 million barrels of oil equivalent a day.

Offshore Energy Today Staff

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