Lower oil, gas and LNG prices put a crimp in Shell’s first-half results, but improved production helped the energy major keep delivering strong cash flow figures.
The Anglo-Dutch firm notched up CCS earnings attributable to shareholders excluding identified items of £7.2 billion in the first six months of the year, down 13% year-on-year.
Pre-tax profits dropped by about a fifth to £11.8bn, on revenues of £143bn, down 6% on last year.
Free cash flow totalled £9bn, a decline of 26% compared to H1 2018.
The company said the outcome reflected lower prices, but also weaker chemicals and refining margins, as well as higher provisions.
Changes to international reporting standards took a £50 million chunk out of earnings.
But total production nudged up 1% to 3.7m barrels of oil equivalent (boe) per day.
Highlights for the first-half included first oil from the Appomattox field in the Gulf of Mexico.
It is expected to peak at 175,000 boe per day.
Compared with the first half 2018, total upstream production increased by 4%, mainly due to field ramp-ups in North America and the transfer of the Salym asset from the integrated gas segment, partly offset by field decline and divestments.
Output is expected to be higher by some 50-100,000 boe per day in the third quarter.
And Shell today launched the next tranche of its share buyback programme, with a maximum aggregate consideration of £2.26bn in the period up to and including October 28, 2019.
The company is in the process of buying back at least £19bn of its shares by the end of 2020.
Shell chief executive Ben van Beurden said: “We have delivered good cash flow performance, despite earnings volatility, in a quarter that has seen challenging macroeconomic conditions in refining and chemicals as well as lower gas prices.
“This quarter we achieved some key milestones, such as the start-up of Appomattox and the first LNG cargo from Prelude. These add to our competitive portfolio, which is expected to generate additional cash in the coming quarters.
“The resilience of our upstream and customer-facing businesses and their ability to generate cash support the delivery of our 2020 outlook, which remains unchanged.”