Royal Dutch Shell said its natural gas trading business overcame supply disruptions to post “significantly higher” earnings for the fourth quarter compared with the previous three months amid record gas prices – but oil product sales were less buoyant.
The energy company said the "high liquid natural gas spot price environment" gave the company a boost, according to a trading update ahead of its fourth-quarter results on February 3, making it one of the few winners during the energy crisis gripping Britain and wider Europe.
However, when it came to oil product sales, the FTSE 100 listed company expects to post a loss as it is hit by "seasonal trends, the demand impact due to the Omicron virus and foreign exchange impacts in Turkey” after a plunge in the Turkish lira.
The company also expects its oil business to be affected by maintenance at its Scotford refinery in Canada as well as the "Hurricane Ida recovery efforts in Norco", Louisiana.
Natural gas and electricity prices around the world have risen sharply since the middle of last year on tight gas supplies and higher demand as economies rebounded from the Covid-19 pandemic with benchmark European gas and Asian LNG prices hitting all-time highs in the fourth quarter.
Shell, like its rivals, suffered a huge loss in 2020 when the Covid-19 pandemic slashed energy demand and sent crude prices plummeting and the focus shifted to a net zero future.
Shell has a large global portfolio of natural gas, which is supplied by pipeline or carried in its liquefied form by ocean-going vessels.
Despite soaring prices, earnings from the fuel fell short in the third quarter because of production problems in several locations.
However, the company said it had overcome these challenge, allowing it to benefit from a rally in which gas prices more than tripled in 2021 when demand surged as economies reopened from lockdowns.
This combined with lower supplies from Russia sent wholesale gas prices to record highs, which led to the collapse of more than 25 energy providers in Britain.
There are now fears of a cost-of-living crisis with average UK household bills expected to more than double in April when the domestic price cap goes up, putting pressure on the government to step in to protect consumers.
Shell's profits may fuel further calls from the UK's Labour Party for a windfall tax to be applied on energy companies in an effort to ease the cost-of-living crunch.
Separately, Shell is distributing $7 billion to shareholders from the sale agreed last year of its assets in the shale-oil-rich US company Permian Basin to rival ConocoPhillips.
The company said it would distribute the remaining $5.5bn of the proceeds in the form of share buybacks.
Later this month, Shell will move its head office from The Hague to London, scrapping its dual share structure in the process and changing its name to Shell – as it moves to simplify its structure and shift its tax residence from the Netherlands.
The news comes after Shell shareholders voted overwhelmingly last month to switch the location of the group's headquarters after a century and drop Royal Dutch from the name.
Europe's biggest energy company said the move will also speed up its transition from fossil fuels that cause climate change.
Tributes from the UAE's personal finance community
• Sebastien Aguilar, who heads SimplyFI.org, a non-profit community where people learn to invest Bogleheads’ style
“It is thanks to Jack Bogle’s work that this community exists and thanks to his work that many investors now get the full benefits of long term, buy and hold stock market investing.
Compared to the industry, investing using the common sense approach of a Boglehead saves a lot in costs and guarantees higher returns than the average actively managed fund over the long term.
From a personal perspective, learning how to invest using Bogle’s approach was a turning point in my life. I quickly realised there was no point chasing returns and paying expensive advisers or platforms. Once money is taken care off, you can work on what truly matters, such as family, relationships or other projects. I owe Jack Bogle for that.”
• Sam Instone, director of financial advisory firm AES International
"Thought to have saved investors over a trillion dollars, Jack Bogle’s ideas truly changed the way the world invests. Shaped by his own personal experiences, his philosophy and basic rules for investors challenged the status quo of a self-interested global industry and eventually prevailed. Loathed by many big companies and commission-driven salespeople, he has transformed the way well-informed investors and professional advisers make decisions."
• Demos Kyprianou, a board member of SimplyFI.org
"Jack Bogle for me was a rebel, a revolutionary who changed the industry and gave the little guy like me, a chance. He was also a mentor who inspired me to take the leap and take control of my own finances."
• Steve Cronin, founder of DeadSimpleSaving.com
"Obsessed with reducing fees, Jack Bogle structured Vanguard to be owned by its clients – that way the priority would be fee minimisation for clients rather than profit maximisation for the company.
His real gift to us has been the ability to invest in the stock market (buy and hold for the long term) rather than be forced to speculate (try to make profits in the shorter term) or even worse have others speculate on our behalf.
Bogle has given countless investors the ability to get on with their life while growing their wealth in the background as fast as possible. The Financial Independence movement would barely exist without this."
• Zach Holz, who blogs about financial independence at The Happiest Teacher
"Jack Bogle was one of the greatest forces for wealth democratisation the world has ever seen. He allowed people a way to be free from the parasitical "financial advisers" whose only real concern are the fat fees they get from selling you over-complicated "products" that have caused millions of people all around the world real harm.”
• Tuan Phan, a board member of SimplyFI.org
"In an industry that’s synonymous with greed, Jack Bogle was a lone wolf, swimming against the tide. When others were incentivised to enrich themselves, he stood by the ‘fiduciary’ standard – something that is badly needed in the financial industry of the UAE."
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UAE currency: the story behind the money in your pockets
Gothia Cup 2025
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MATCH INFO
Europa League semi-final, second leg
Atletico Madrid (1) v Arsenal (1)
Where: Wanda Metropolitano
When: Thursday, May 3
Live: On BeIN Sports HD
GREATEST ROYAL RUMBLE CARD
The line-up as it stands for the Greatest Royal Rumble in Saudi Arabia on April 27
50-man Royal Rumble
Universal Championship
Brock Lesnar (champion) v Roman Reigns
Casket match
The Undertaker v Rusev
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Seth Rollins (champion) v The Miz v Finn Balor v Samoa Joe
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The Bludgeon Brothers v The Usos
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Sheamus and Cesaro v Bray Wyatt and Matt Hardy
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Jeff Hardy (champion) v Jinder Mahal
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Triple H v John Cena
To be confirmed
AJ Styles will defend his WWE World Heavyweight title and Cedric Alexander his Cruiserweight Championship, but matches have yet to be announced
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
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Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
