Oil giant Shell posted a jump in earnings on the current cost of supply basis, boosted by higher oil and gas prices, in what Shell CEO said was one of the company’s strongest ever quarters.
The company’s CCS earnings attributable to shareholders excluding identified items were around $5.62 billion, 37% higher compared to 2017 3Q of around $4.1 billion.
“Earnings primarily benefited from increased realized oil, gas and LNG prices as well as higher contributions from trading in Integrated Gas, partly offset by lower margins in Downstream, higher deferred tax charges in Upstream and adverse currency exchange effects,” Shell said.
Royal Dutch Shell Chief Executive Officer, Ben van Beurden, said: “Good operational delivery across all Shell businesses produced one of our strongest-ever quarters, with cash flow from operations of $14.7 billion, excluding working capital movements.”
Shell’s Upstream segment earnings came in at $2.25 billion, up from $575 million a year ago.
“Compared with the third quarter 2017, Upstream earnings excluding identified items reflected higher realized oil and gas prices as well as lower depreciation. These were partly offset by negative movements in deferred tax positions, which included impacts arising from changes in the upstream fiscal regime in Brazil, as well as a provision for unitisation settlements related to pre-salt assets in Brazil.”
“Total production increased by 1% compared with the third quarter of 2017, mainly driven by new field start-ups and ramp-ups, partly offset by divestments. Excluding portfolio impacts, production was 4% higher than in the same quarter a year ago,” Shell said.
Giving its forecast for the fourth quarter Shell said that compared with the fourth quarter 2017, Upstream production is expected to be 80 – 120 thousand boe/d higher, mainly due to lower maintenance activity and growth from new fields more than offsetting the impacts of field decline and divestments.