Shell 1Q boosted by higher prices, strong trading

Shell 1Q boosted by higher prices, strong trading

London, 5 May (Argus) — Shell boosted its underlying profit and cash flows in the first quarter of 2022, thanks to higher oil and gas prices and strong trading, the company said today.

Shell's profit, excluding inventory effects, was $5.03bn, a 16pc improvement from a year earlier but less than half the $11.08bn it generated in the final quarter of 2021. The firm took $4.24bn of impairment charges related to its intention to withdraw from Russian oil and gas activities, including its involvement in the Nord Stream 2 pipeline project, its ventures with state-controlled Gazprom and its service station and lubricants operation in the country.

Shell's adjusted earnings for the quarter was $9.13bn, well beating analysts' consensus estimate of $8.12bn. There was strong trading in LNG and in refining and chemicals during the quarter, new chief financial officer Sinead Gorman said.

The company's cash flow from operations jumped by 81pc from the preceding quarter to $14.8bn, which it said reflected favourable derivatives movements caused by settlement of contracts during the quarter. Shell reduced its net debt by $4.1bn during the three months to $48.5bn, bringing its gearing down to 21.3pc from 23.1pc.

Shell's first-quarter production, at 2.96mn b/d of oil equivalent (boe/d), was substantially