Photo: Ben Van Beurden, Shell CEO/ Image by Bartolomej Tomić

Shell’s 1Q profit dips but beats expectations

Oil major Shell on Thursday reported $5.4 billion earnings on a CCS basis, excluding identified items for the first quarter of 2019. This is a two percent drop compared to the first quarter of 2018, but still, a better result than analysts expected.

Ben Van Beurden, Shell CEO / Image by Bartolomej Tomić

Shell said the result reflected lower realized chemicals and refining margins, decreased realized oil prices and lower tax credits.

The oil major added this was partly offset by stronger contributions from trading as well as increased realized LNG and gas prices compared with the first quarter of 2018.

According to financial journals, the result came as a surprise to analysts as they’d predicted Shell to earn $4.5 billion for the quarter.

Revenue for the quarter was $83.7 billion, down from $89 billion a year ago. Upstream earnings excluding identified items rose to 1.7 billion, from 1.5 billion in 1Q 2018.

Total oil and gas production fell 2 percent to 3,752 million barrels of oil equivalent per day.

Shell CEO Ben van Beurden said: “Shell has made a strong start to 2019, with the first quarter financial performance demonstrating the strength of our strategy and the quality of our portfolio of assets…Our integrated value chain enabled our Downstream business to deliver robust results despite challenging market conditions.”

As for the upstream portfolio developments, during the quarter, Shell announced first oil at the Petrobras-operated Lula North deep-water development in the Santos Basin offshore Brazil. In April, Shell announced the sale of its 22.5% non-operating interest in the Caesar Tonga asset in the US Gulf of Mexico to Delek for $965 million. Also in April, Shell announced a discovery from the Blacktip deep-water well, located in the US Gulf of Mexico.

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