Shell, Awash With Cash, to Boost Dividend, Share Buybacks

The London-based company said that lower refining and chemicals-production margins were partially offset by higher volumes from deep-water oil and gas production. Shell is one of the biggest players in Gulf of Mexico oil drilling, and continues to invest billions of dollars in the region.

Overall, Shell’s third-quarter profit on a net current-cost-of-supplies basis—a figure similar to the net income that U.S. oil companies report—was $8.3 billion, compared with an $880 million loss in the year-ago period.

Adjusted earnings, which strip out certain commodity-price adjustments and one-time charges, were $9.5 billion, slightly beating the $9 billion analysts’ consensus forecast for the quarter compiled by the company. That was down from $11.5 billion in the second quarter but up from $4.1 billion in the year-ago quarter.

Shell said it would reward investors with a continued bonanza of cash payouts. It said it would buy back another $4 billion of its shares over the next three months, bringing announced buybacks this year to $18.5 billion. Shell also said Thursday it intends to increase its per-share dividend by 15%, for the fourth quarter, pending board approval, after paying $0.25 per share in the third quarter.

Shares were up 3.6% in morning trading in London on Thursday.

Oil giants have been swimming in cash this year as manufacturing and global travel recover from their pandemic doldrums, with demand for natural gas and fuel outstripping supplies for months. Rather than plow that cash into large new oil-and-gas projects, companies have returned tens of billions of dollars to investors, stoking political scrutiny in the U.S. and Europe as high prices for gasoline and natural gas have crippled consumers and fueled recession worries.

Still, Shell’s results on Thursday, which follow two quarters of record profit, also reflect how the world’s biggest oil-and-gas companies are navigating highly turbulent markets in the wake of Russia’s invasion of Ukraine. The war has spurred a global struggle to secure enough gas to heat homes and keep power plants and factories running, especially in Europe.

Markets also have been whipsawed by natural-gas price drops as warmer-than-normal temperatures have helped to cause a seasonal glut of the fuel. Europe is still expecting struggles to maintain adequate gas supplies after this winter, and for years to come.

Shell is grappling with these issues as it works to balance its traditional profit-heavy oil-and-gas businesses with pressures from investors, governments and climate activists to push further into lower-carbon energy such as wind, solar power and green hydrogen.

The company is also preparing for a change of leadership, with Shell last month naming

Wael Sawan,

its head of integrated gas and renewables, as its next chief executive, succeeding longtime CEO

Ben van Beurden.

Mr. Sawan is expected to take the top job on Jan. 1.

Write to Jenny Strasburg at [email protected]

The London-based company said that lower refining and chemicals-production margins were partially offset by higher volumes from deep-water oil and gas production. Shell is one of the biggest players in Gulf of Mexico oil drilling, and continues to invest billions of dollars in the region.

Overall, Shell’s third-quarter profit on a net current-cost-of-supplies basis—a figure similar to the net income that U.S. oil companies report—was $8.3 billion, compared with an $880 million loss in the year-ago period.

Adjusted earnings, which strip out certain commodity-price adjustments and one-time charges, were $9.5 billion, slightly beating the $9 billion analysts’ consensus forecast for the quarter compiled by the company. That was down from $11.5 billion in the second quarter but up from $4.1 billion in the year-ago quarter.

Shell said it would reward investors with a continued bonanza of cash payouts. It said it would buy back another $4 billion of its shares over the next three months, bringing announced buybacks this year to $18.5 billion. Shell also said Thursday it intends to increase its per-share dividend by 15%, for the fourth quarter, pending board approval, after paying $0.25 per share in the third quarter.

Shares were up 3.6% in morning trading in London on Thursday.

Oil giants have been swimming in cash this year as manufacturing and global travel recover from their pandemic doldrums, with demand for natural gas and fuel outstripping supplies for months. Rather than plow that cash into large new oil-and-gas projects, companies have returned tens of billions of dollars to investors, stoking political scrutiny in the U.S. and Europe as high prices for gasoline and natural gas have crippled consumers and fueled recession worries.

Still, Shell’s results on Thursday, which follow two quarters of record profit, also reflect how the world’s biggest oil-and-gas companies are navigating highly turbulent markets in the wake of Russia’s invasion of Ukraine. The war has spurred a global struggle to secure enough gas to heat homes and keep power plants and factories running, especially in Europe.

Markets also have been whipsawed by natural-gas price drops as warmer-than-normal temperatures have helped to cause a seasonal glut of the fuel. Europe is still expecting struggles to maintain adequate gas supplies after this winter, and for years to come.

Shell is grappling with these issues as it works to balance its traditional profit-heavy oil-and-gas businesses with pressures from investors, governments and climate activists to push further into lower-carbon energy such as wind, solar power and green hydrogen.

The company is also preparing for a change of leadership, with Shell last month naming

Wael Sawan,

its head of integrated gas and renewables, as its next chief executive, succeeding longtime CEO

Ben van Beurden.

Mr. Sawan is expected to take the top job on Jan. 1.

Write to Jenny Strasburg at [email protected]