Two supermajors, Shell and Chevron have made impressive earnings in the second quarter of 2022, despite the harsh economic environment across the world.
According to Shell plc Chief Executive Officer, Ben van Beurden, he said: “With volatile energy markets and the ongoing need for action to tackle climate change, 2022 continues to present huge challenges for consumers, governments, and companies alike. Consequently, we are using our financial strength to invest in secure energy supplies which the world needs today, taking real, bold steps to cut carbon emissions, and transforming our company for a low-carbon energy future. And, crucially, our Powering Progress strategy is delivering strong results for our shareholders on the back of years of portfolio high grading, combined with robust operational performance.
We are increasing shareholder distributions through a $6 billion share buyback programme which is expected to be completed by Q3 2022 results.”
He attributed the high performance to discipline and more resilience among others:
▪ Strong performance in a turbulent economic environment with Adjusted Earnings of $11.5 billion in Q2 2022. Adjusted EBITDA of $23.1 billion in Q2 2022 versus $19.0 billion in Q1 2022.
▪ Announced $6 billion share buybacks are expected to be completed by Q3 2022 results; total distributions significantly in excess of 30% of CFFO for the last four quarters. With the current energy sector outlook and subject to Board approval, shareholder distributions are expected to remain in excess of 30% of CFFO.
▪ In the first half of 2022 shareholder distributions have doubled from those in the first half of 2013, a decade ago, when Brent prices were similar, with increased discipline, integrated value delivery and improved resilience driving better results.
▪ Strengthening energy security through natural gas investments in Pierce and Jackdaw (UK), participation in the North Field LNG expansion (Qatar) and Crux FID (Australia). Positioning for the future of energy with a final investment decision for Holland Hydrogen I (Netherlands) and progressing the completion of the acquisition of Sprng Energy (India).
▪ Disciplined cash capex: expected to be in the $23 – 27 billion range in 2022.
Chevron on the other hand, reported earnings of $11.6 billion ($5.95 per share – diluted) for second quarter 2022, compared with $3.1 billion ($1.60 per share – diluted) in second quarter 2021. Included in the current quarter were charges associated with an early contract termination of $600 million, pension settlement costs of $11 million, and a gain on asset sales of $200 million. Foreign currency effects increased earnings by $668 million. Adjusted earnings of $11.4 billion ($5.82 per share – diluted) in second quarter 2022 compares to adjusted earnings of $3.3 billion ($1.71 per share – diluted) in second quarter 2021.
Sales and other operating revenues in second quarter 2022 were $65 billion, compared to $36 billion