Shell makes nearly £1.4bn more than expected in opening quarter

Shell said that its adjusted earnings had risen by 5.7 per cent compared to the same quarter a year earlier, reaching 9.6 billion dollars (£7.6bn).

The business said that compared to the last three months of 2022, it had faced unfavourable tax movements, and the price it was able to sell oil and gas at dropped.

However, Shell said that it had managed to offset some of this through cutting operating expenses and a rise in its chemicals and products trading business.

The company said that it had decreased production slightly compared to a year ago, to 2.9 million barrels of oil equivalent per day. Revenue rose 3.3 per cent to just under 87 billion dollars (£69bn).

It also announced plans to buy back shares worth four billion dollars (£3.2bn) from investors over the next three months to return cash to its owners.

On completion, the company will have distributed around 12 billion dollars (£9.6bn) to its shareholders in the first six months of 2023.

Chief executive Wael Sawan said: “In Q1 Shell delivered strong results and robust operational performance, against a backdrop of ongoing volatility, while continuing to deliver vital supplies of secure energy.

“We will commence a 4 billion dollar share buyback programme for the next three months as part of our commitment to deliver attractive shareholder returns.”

Like its rival BP, Shell’s results immediately sparked calls for the Government to take a tougher stance against the oil majors.

Over the quarter, Shell said it had strengthened its portfolio with the completion of the acquisition of Nature Energy.

The company said that it further simplified its portfolio through the

divestment of non-core upstream positions in onshore California and offshore Malaysia.

Shell said that chemicals margins improved due to lower feedstock and utility costs compared with the fourth quarter of 2022.

Shell Energy Australia also entered into a partnership to deliver a utility-scale battery energy storage system in Cranbourne, Victoria. Shell has access to 100 per cent of the battery’s offtake over a 20-year period, the company said.

Earlier this week, it was revealed that BP’s profits were more than half a billion pounds more than expected in the first three months of the year as the business continued to benefit from elevated energy prices.

Bosses revealed on Tuesday that the company made just under five billion US dollars (£4bn) in underlying replacement cost profit between January and March, citing a strong performance in its oil trading business.

Chief executive Bernard Looney said earlier this week: “This has been a quarter of strong performance and strategic delivery as we continue to focus on safe and reliable operations.”

The profit immediately sparked criticism, including from shadow energy secretary Ed Miliband, who called it “unearned” and “unexpected windfalls of war”. BP has already been hit by extra windfall taxes on the profits it makes from pumping oil and gas from UK waters.