Mahriq.com

We are Mahriq

Shell earns a lot of gas and invests billions in buying its shares

Shell Energy Group reported this Friday in an update for the fourth quarter of 2021.

The gas price hike is largely in the hands of Shell, which is under pressure from shareholders to make more returns from more sustainable production. The spot market posted a sharp improvement in results last quarter, with buyers everywhere buying LNG in case of shortages. Sales results will be “significantly higher” than the third quarter of 2021, according to Shell, which will publish its annual results on February 3.

In the Netherlands too, additional gas is being purchased from this market now that the grid fill level is historically low due to setbacks and limited buying.

Shell expects to achieve significantly less good results in the oil trading and refining activities in particular. It refers, among other things, to the damage caused by Hurricane Ida in the United States.

Shell said Friday that cash flow in the oil sector is limited by about $1 billion in spending on mandatory carbon dioxide emissions rights, needed to sell its oil products in Europe and North America.

Share buy back

Shell sold its oil extraction activities on the western side of the Permian base area on September 20 last year for $9.5 billion to producer ConocoPhillips.

The decision was made on December 31 during the first meeting of the Board of Directors at the new head office in London, where the Executive Board also moved after leaving The Hague.

Shell is now fully British after shareholders approved plans to scrap the dual-share, Dutch and UK stock structure late last year.

The company said last year it would return $7 billion of its proceeds to shareholders, $1.5 billion in share buybacks. This $5.5 billion complements this resolution.

Instant Market Profit

On the other hand, results at Shell LNG were hit by an unexpected production setback in Australia, as work on the Prelude platform halted.

Around this time last year, Shell said projected production would be between 900 thousand and 940 thousand barrels of oil per day. That now ranges between the equivalent of 910,000 to 950,000 barrels, according to Friday’s update.

The decision may respond to some investor approval: On flat AEX, the stock is trading on Friday afternoon.

Mark van Bale of the collective contributor Follow this calls the update disappointing. “Not a word in the numbers for more sustainable production, four years after Shell announced its commitment to the Paris Climate Agreement. At least show what you’ve started, what it’s doing, but again you won’t read anything about it in these numbers and the explanation. It’s telling: the company says it’s It has become more sustainable, but such an update of its activities does not show this at all. ”

Van B describes the fact that Shell would return $5.5 billion from the sale, “a complete lack of ideas on the part of the board of directors. Shell could have used the money to accelerate this transition to sustainable energy.”