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The Hague-based LNG giant Shell reported a sharp increase in its first-quarter profit, boosted by contributions from its Integrated Gas and Upstream businesses.
Shell’s profit increased by $1.6 billion, reaching $5.3 billion, 42 percent above the figures reported in the corresponding quarter last year.
“Shell’s strong earnings this quarter were underpinned by higher oil and gas prices, the continued growth and very good performance of our Integrated Gas business, and improved profitability in our Upstream business, “ the company’s CEO Ben van Beurden said.
He added that the company boasts a strong financial framework. “Our commitment to capital discipline is unchanged, we are making good progress with our $30 billion divestment programme and our outlook for free cash flow – which covered our cash dividend and interest this quarter and over the last year – is consistent with our intent to buy back at least $25 billion of our shares over the period 2018-2020.”
Shell’s LNG sales up
While slightly offset by an impairment charge of $50 million and additional recognized items, the Integrated Gas business earned $2.4 billion, 31 percent up on the $1.8 billion reported in the first quarter of 2017.
Compared with the first quarter 2017, Integrated Gas earnings excluding identified items benefited from increased contributions from trading, higher volumes and higher realized oil, gas and LNG prices. This more than offset the impact of higher operating expenses.
Despite the Woodside divestment that was completed in the fourth quarter 2017, LNG liquefaction volumes increased by 9 percent compared with the first quarter 2017, mainly due to higher volumes from Gorgon and increased feedgas supply across the portfolio.
LNG sales volumes jumped 17 percent on year up to 18.58 million tons from 15.84 million tons reported in Q1 2017.
Compared with the first quarter 2017, total production increased by 31 percent, mainly due to higher volumes from Pearl GTL and Gorgon projects.