[ad_1]
Energy giant Shell on Friday said it expects to see earnings from its natural gas business to rebound in the third quarter following a disappointing set of results in the second quarter.
The oil major
SHEL,
SHEL,
said it expects income from its integrated gas business – which is dominated by the firm’s lucrative liquified natural gas (LNG) operations – to be higher in the third quarter than the second quarter, after earnings from the segment plummeted in the first half of the year.
Lower gas prices saw earnings from Shell’s integrated gas segment fall from $2.4 billion in the first quarter to $754 million, following a bumper year for the energy giant in 2022 caused by soaring fuel prices related to the global bounce back from Covid and the war in Ukraine.
Now, Shell has said it expects its earnings to recover in the third quarter, following a slight uptick in natural gas prices in recent months, even as it warned LNG production would be lower due to scheduled maintenance.
The London-listed firm, which was first formed in 1907, told investors it is set to produce between 6.6 and 7.0 million metric tons of LNG in the third quarter, compared to 7.17 million tons of the liquified fuel in the second quarter.
Shell stock rose 0.8% on Friday and has gained 10% this year.
The FTSE 100 company
UK:UKX
said the lower production figures are the result of scheduled maintenance in its Trinidad and Tobago operations and at its Prelude floating LNG facility off Australia’s west coast, which has capacity to produce 3.6 million tons of LNG each year.
Shell, which delivered the first ever commercial cargo of LNG from Algeria to the UK in 1964, has pinned hopes for its future on selling the liquified fuel, as it seeks to profit on the global energy transition and the shift from gas to coal.
The Anglo-Dutch oil major’s positive forecast comes as the Wall Street Journal on Friday reported that Shell’s American rival, Exxon Mobil
XOM,
is closing in on a deal to take over Texan oil and gas company Pioneer Natural Resources for sums of around $60 billion.
The blockbuster deal would give Exxon a dominant position in the oil-rich Permian Basin, in West Texas and New Mexico, in a takeover that would boost Exxon’s push to increase production of gas and oil.
Exxon Mobil, which posted record profits of $56 billion in 2022 on the back of soaring oil and gas prices, has doubled down on increasing production of fossil fuels, despite mourning pressure from environmentalists and activist investors.
In June, Shell’s new CEO Wael Sawan, reversed the oil major’s plans to cut oil production, after the company’s former CEO Ben Van Beurden vowed to slash oil output by 1-2% each year through to 2030.
[ad_2]
Source link
