Royal Dutch Shell PLC responded to external pressure by setting a more ambitious target for cutting greenhouse gas emissions from its operations, while reporting an increase in third-quarter profit that fell short of expectations.
Like its peers, Shell has been lifted by the surge in oil and gas prices, but nevertheless finds itself pulled in many different directions by people unhappy with its plans.
Dan Loeb’s Third Point Capital LLC is seeking the breakup of the energy giant, a move that would thwart its plan to keep pumping oil and gas as it embraces renewable energy.
Photo: Reuters
A Dutch court has also ordered the company to cut carbon emissions much faster than it had previously planned.
“This quarter we’ve generated record cash flow, maintained capital discipline and announced our intention to distribute US$7 billion to our shareholders,” Shell CEO Ben van Beurden said in a statement yesterday.
Combined with the more ambitious emissions target, “this is clear evidence of how we are accelerating our Powering Progress strategy, purposefully and profitably,” he added.
The Anglo-Dutch company set an absolute carbon-reduction target of 50 percent by 2030, compared with 2016 levels on a net basis. The new goal covers scope 1 and scope 2 emissions, which are directly under Shell’s operational control. It does not affect the bulk of the greenhouse gases resulting from Shell’s business — scope 3 emissions that are released when customers burn fuel.
Shell’s third-quarter adjusted net income was US$4.13 billion, up from US$955 million a year earlier, but well below analysts’ average estimates of US$5.42 billion. Cash flow from operations jumped to US$16.03 billion, compared with US$10.4 billion a year earlier.
Like its peers, Shell kept a tight lid on spending, despite surging profits. The company expects capital expenditure to total US$20 billion this year, down from previous guidance that went as high as US$22 billion.
TOTALENERGIES
TotalEnergies SE’s profit in the third quarter rose by more than expected, making the French oil and gas producer the latest beneficiary of high energy prices.
While an energy supply crunch is wreaking havoc on Europe’s economy, it is lifting the earnings of major producers to multiyear highs.
TotalEnergies’ adjusted net income rose to US$4.77 billion in the three months ended Sept. 30, a fivefold increase from US$848 million a year earlier, the company based in Paris said in a statement yesterday. That exceeded analysts’ average estimate of US$4.32 billion.
“The global economic recovery, notably in Asia, drove all energy prices sharply higher in the third quarter,” TotalEnergies CEO Patrick Pouyanne said in the statement.
The firm benefited in particular from its position as a world leader in liquefied natural gas, he said.
TotalEnergies’ capital expenditure is to remain unchanged from last year at US$13 billion this year.
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