Shell Navigates Profit Drop Amid Lower Refining Margins and LNG Trading Challenges

Shell reported a decline in fourth-quarter profits, missing estimates due to lower refining margins and LNG trading difficulties. Despite a drop in adjusted earnings, Shell announced a share buyback and a dividend increase. Challenges in refining operations and ongoing LNG supply disputes further affect its financial performance.

Shell, the oil and gas major, reported a significant drop in its fourth-quarter profits on Thursday, falling short of analysts' expectations. The decline was attributed to lower refining margins and challenges in LNG trading. In response, the company announced a $3.5 billion share buyback program and a 4% increase in dividends.

Adjusted earnings for the quarter, deemed as Shell's definition of net profit, amounted to $3.66 billion, down from $7.31 billion in the previous year. This was below the $4.09 billion forecast by a Vara Research survey of analysts. The results place additional pressure on CEO Wael Sawan, who is steering the company back to its core oil, gas, and biofuels sectors, amid a strategic retreat from renewable power ventures.

Looking ahead, Shell forecasts that its 2025 capital expenditure will fall below last year's $21 billion, with further details expected at its capital markets day in March. Meanwhile, the company continues to face challenges, including a $229 million adjusted loss in its chemicals and products unit and deliberations over LNG supply disputes involving Venture Global's Calcasieu Pass facility.