Shell reported a second-quarter profit of $6.3 billion, representing a 19% drop from the previous quarter due to weakened refining margins and oil and gas trading. However, this figure surpassed analysts’ expectations and was nearly 25% higher than the same period last year, indicating the effectiveness of CEO Wael Sawan’s cost-cutting initiatives.
The results reflect strong performance in Shell’s oil and gas production and retail marketing sectors. In contrast, Europe’s major oil companies have reported lower refining margins this quarter following two years of exceptional profits.
In related news, BP raised its dividend by 10% after reporting earnings of $2.8 billion, while TotalEnergies experienced a 6% decline in profits due to similar margin pressures.
Sawan noted that the energy system is returning to pre-2022 normalized levels after a surge in prices following the Russia-Ukraine conflict. Under Sawan’s leadership, Shell has scaled back on renewables and hydrogen projects, focusing instead on higher-margin oil and gas operations.
Shell secured several liquefied natural gas deals in the quarter and invested in new hydrogen and carbon capture projects. The company achieved cost reductions of $700 million in the first half of 2024, with a total target of $2 billion to $3 billion in savings by 2025.