Oil and gas company Shell’s fourth-quarter profit plunged by more than 25 per cent on an annual basis amid lower oil prices.
The company’s adjusted profit for the three months to the end of December declined to $7.3 billion, the company said on Thursday.
Full-year profit also fell 29 per cent year-on-year to $28 billion driven by “lower realised oil and gas prices, lower volumes, and lower refining margins, partly offset by higher LNG [liquefied natural gas] trading and optimisation margins and higher marketing margins”, the company said.
Oil prices, which endured another rollercoaster ride last year, posted their biggest annual drop since 2020 amid persistent concerns about lower demand as well as geopolitical and economic uncertainties.
The Israel-Gaza war, which started in early October, initially pushed prices up, although crude soon shed those gains on demand concerns.
Oil prices rose in the last two weeks amid continued Middle East tensions and attacks by Houthi rebels on ships passing through the Red Sea.
Brent, the benchmark for two thirds of the world’s oil, was trading 0.71 per cent higher at $81.12 a barrel at 1.50pm UAE time.
West Texas Intermediate, the gauge that tracks US crude, was up 0.83 per cent at $76.43 a barrel.
Shell's free cash flow for the quarter more than halved to about $7 billion, while cash flow from operating activities reduced to $12.5 billion from $22.4 billion for the same period during the previous year, according to the statement.
The company's capital expenditure reached $24.39 billion in 2023 while operating expenses reached nearly $40 billion.
Shell also announced a 4 per cent increase in dividend per share for the fourth quarter and a $3.5 billion share buyback programme, expected to be completed by the first quarter of this year.
“As we enter 2024 we are continuing to simplify our organisation with a focus on delivering more value with less emissions,” Shell chief executive Wael Sawan said.
