Shell’s Profit Party: Dancing on Oil Barrels While the World Burns

Posted by John Donovan: 6 Mar 24

Oh, what a day to be alive! Shell, our favourite environmental villain, just threw its quarterly earnings bash, and guess what? Profits are through the ozone layer, folks! Up a whopping 42 percent to the highest in over three years, all thanks to those ever-so-gentle oil price hikes and squeezing more out of the earth like it’s an old toothpaste tube. But, hold your gasps, because the plot thickens—or should we say, the oil slickens? Despite bathing in cash, Shell somehow managed to disappoint the world yet again with its cash flow not living up to the high expectations. Who could’ve guessed?

As the clock struck 1025 GMT, Shell’s shares took a dive faster than you can say “fossil fuels are the past,” down 2.1 percent. Meanwhile, the rest of the energy sector was up, probably chuckling at Shell’s little misstep. Barclays analysts, ever the party poopers, expected this little tumble. They remarked, “The focus for the big oils in recent months has been the return to free cash flow, particularly given how strong Q1 normally is seasonally for the group.” Talk about a buzzkill, right?

Now, Shell, ever the optimist in the face of our rapidly deteriorating planet, scrapped its scrip dividend as if to say, “Look at us, we’re financially stable enough to actually pay our shareholders without creating more shares!” They even plan to buy back $25 billion of shares by 2020 to make up for past generosity and their $54 billion splurge on BG Group. Jessica Uhl, Shell’s CFO, played coy with the details of when the buybacks would start, saying they were “on track but not there yet.” It’s like planning a massive party but not sending out the invites.

Despite the profit fiesta, Shell’s cash flow from operations took a tiny stumble to $9.43 billion, barely missing their own party from last year. Uhl blamed it on those pesky rising oil prices and some one-off tax payments. Oh, and let’s not forget, their net income attributable to shareholders shot up to $5.322 billion. The room must’ve been too small for such big numbers, or maybe it’s just hard to count with all that oil in their eyes.

Oil and gas production is up, because why not pump more of what’s warming our planet, right? It grew by 2 percent to 3.839 million barrels of oil equivalent per day. And earnings for this segment? Almost tripled. Because clearly, what the world needs right now is more oil.

But it’s not all sunshine and rainbows in Shell Land. The refining and marketing segment, our beloved downstream, took a hit with lower refining margins and plant availability. And let’s not glance over Brent oil prices reaching $75 per barrel, their highest since the good old days of 2014, with prices averaging about $67 a barrel in the first quarter, up nearly 25 percent from a year earlier.

So there you have it, folks. Shell’s living it up, profits soaring high while the rest of us are left dealing with the consequences. Who needs clean air and water when you can have shareholder dividends? Let’s give a round of applause for Shell, truly a beacon of hope in these trying times.

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