Oil giant Shell unveils plans to increase dividend on third-quarter profit

Shell’s logo on an oil storage silo, past the tank wagons at the company’s Pernis refinery in Rotterdam, the Netherlands, on Sunday, October 23, 2022.

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British oil giant Shell reported a third-quarter profit on Thursday, but lower refining and trading revenues ended a string of record quarterly results.

Shell posted an adjusted profit of $9.45 billion for the three months to the end of September, meeting analyst expectations of $9.5 billion, Refinitiv said. The company posted an adjusted profit of $4.1 billion for the same period a year earlier and posted a whopping $11.5 billion for the second quarter of 2022.

The oil giant said it plans to increase its dividend per share by about 15% for the fourth quarter of 2022, to be paid in March 2023. It also announced a new share buyback program, which is expected to result in an additional $4 billion in distributions and is expected to be completed by the next earnings release.

Shell shares are up more than 41% over the year.

The London-headquartered oil giant reported consecutive quarters of record profits in the first six months of the year, benefiting from rising commodity prices following Russia’s invasion of Ukraine.

However, Shell warned in an update earlier this month that lower refining and chemicals margins and weaker gas trading were likely to negatively impact third-quarter earnings.

On Thursday, the company said a recovery in global product offerings had contributed to lower refining margins in the third quarter and revenues from gas trading had also fallen.

“Trading and optimization contributions were primarily impacted by a combination of seasonality and supply constraints, coupled with significant differences between paper and physical realizations in a volatile and disrupted market,” Shell said in a press release.

Change in leadership

The group’s results come shortly after the announcement that CEO Ben van Beurden will step down at the end of the year, after nearly ten years at the helm.

Wael Sawan, currently director of integrated gas, renewable and energy solutions at Shell, will become the next chief executive on January 1.

Sawan holds dual Lebanese-Canadian nationality and has held positions in downstream retail and various commercial projects throughout his 25-year career at Shell.

“I look forward to channeling the pioneering spirit and passion of our incredible people to meet the immense challenges and seize the opportunities presented by the energy transition,” Sawan said in a statement on Sept. 15, adding that it is an honor to to follow the leadership of Van Beurden.

“We will be disciplined and value-oriented as we work with our customers and partners to deliver the reliable, affordable and cleaner energy the world needs.”

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