Shell on Thursday (May 5) reported a record first-quarter profit of $9.13 billion, boosted by higher oil and gas prices, stellar refining profits and the strong performance of its trading division.
The last of the energy majors to report results, Shell joins sector rivals, including BP BP.L and TotalEnergies, in making big profits from the commodity price volatility stoked by Russia’s invasion of Ukraine that began on Feb. 24.
It beat its previous highest quarterly profits recorded in 2008 even after writing down $3.9 billion post-tax as a result of its decision to exit operations in Russia. It is also winding down oil and gas trading with Russia.
Shell’s shares rose 3.3% in early trading, outperforming the 1.8% rise of an index of oil and gas companies.
By the end of this year, Shell said it would stop all of its long-term Russian crude oil purchases, except two contracts with a “small, independent Russian producer” that it did not name.
Its contracts to import refined oil products from Russia will also end, it said, adding it still had running long-term contracts to buy Russian liquefied natural gas (LNG).
Shell, the world’s largest LNG trader, said sales of the fuel rose by 9% in the quarter to 18.3 million tonnes. LNG is seen as crucial to ending Europe’s reliance on Russian pipeline gas.
The European Union’s chief executive on Wednesday proposed a phased oil embargo on Russia that, if backed by member states would be a watershed for the world’s largest trading bloc given its dependence on Russian fuel, although the bloc has yet to work on a gas ban. Read full story
Shell maintains $1 billion in value of Russian assets on its balance sheet, including for petrol stations, a lubricants plant and future dividends from its stake in Sakhalin-2 LNG project, a spokesperson said.
(Production: Lisa Giles-Keddie)