CITYA.M.
Shell: What to expect from the energy giant’s upcoming fourth-quarter results
NICHOLAS EARL: MONDAY 31 JANUARY 2022 5:15 PM
Shell is set to provide investors with a key update on its massive $7bn share buyback scheme during its fourth-quarter results later this week.
The oil and gas giant has now begun trading with a single line of shares after gaining shareholder approval for the measure last month.
It has also both ditched its long-established Royal Dutch name, rebranding as Shell and shifted its headquarters to London from the Netherlands.
Prior to its departure from the country, Shell was at loggerheads with the Dutch authorities over the 15 per cent dividend withholding tax, and court orders to reduce its carbon emissions by 45 per cent before the end of the decade.
Earlier in January, it released an ambivalent trading report, where it pledged to pursue “at pace” its share buyback, largely funded from the $5.5bn sale of its US shale assets.
However, its update also revealed set backs such as liquefied natural gas (LNG) outages and slower fuel sales due to the economic effect of the Omicron variant this winter, meaning a downturn in performance is likely to be reported in its fourth-quarter figures.
UBS, which has maintained its buy position towards the oil and gas giant, expects the buy-back programme to proceed in a relatively swift fashion.
Edward Moya, senior analyst at OANDA told City A.M. that Shell’s performance over the past three months has likely been hit by operational issues.
This has offset the potential benefit from rallying Brent Crude oil prices, which have skyrocketed to $91 per barrel, with sustained speculation from analysts that prices could hit $100 this year.
He said: “Despite higher prices, the largest trader of LNG has not had an easy time as they’ve been hampered by key outages in Australia. High margin payments are expected to hurt their gas divisions and oil products trading and optimization results are expected to be significantly lower than last quarter.”
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