Shell has said that profits are rising sharply at its gas division as it emerges as one of the biggest winners from the energy crisis gripping Britain.
The FTSE 100 oil behemoth said earnings from its gas division will be “significantly higher” in the fourth quarter of its financial year than during the previous three-month period.
Shell has a large portfolio of gas that is pumped through pipelines or carried on cargo ships in its liquefied form. However, its trading fell short in the third quarter because of production problems in several locations.
The company said it had overcome these issues, allowing it to benefit from a huge rally in which natural gas prices more than tripled in 2021.
Resurgent demand as society reopened after lockdowns, combined with lower supplies from Russia, have driven wholesale gas prices to record highs. In Britain this has sparked the collapse of 26 energy providers and is likely to trigger a 56pc jump in average household bills when the domestic price cap goes up in April.
Shell’s profit-taking will likely fuel further calls for a windfall tax on energy giants from the political left to help ease the cost of living crunch.
Sir Ed Davey, leader of the Liberal Democrats, this week called for a “Robin Hood” tax targeting companies that cashed in on the energy crisis.
But while Shell’s gas profits surged, results in its oil trading and refining division were weaker than expected.
The company said it was likely to post a loss in its oil business as its margins were hit by ongoing maintenance at its Scotford refinery in Canada and the impact of Hurricane Ida.
Shell also vowed to buy back $5.5bn (£4bn) worth of shares “at pace” using the proceeds of asset sales as it looks to woo investors amid greater scrutiny over energy firms during the transition to net zero.
The oil giant announced the buyback last year following the $9.5bn sale of its Permian oil and gas assets.
The move was approved on New Year’s Eve at the first board meeting since the company’s relocation of its headquarters to the UK as part of a major overhaul of its share structure.
