Europe’s largest oil companies, Shell and Total Energies, expanded their share buybacks on Thursday, after their profits in the second quarter of the year exceeded a record compared to the previous quarter, on the back of high oil and gas prices.
The entire oil and gas sector in the world is benefiting from high prices in the markets.
According to figures announced by Shell today, Thursday, its profits in the second quarter of this year amounted to $11.5 billion, smashing the previous record set just three months ago.
Shell said that higher prices in refineries, and better results in the gas and electricity trade, offset the decline in revenues in the liquefied natural gas business.
Shell indicated that its use in its refineries will rise to 90-98 percent in the third quarter, compared to 84 percent in the second quarter. While its production of oil and gas decreased in the second quarter by 2 percent from the previous quarter to 2.9 million barrels of oil equivalent per day.
Total Energies
The French competitor Total Energies announced today that it achieved record profits of $9.8 billion, an increase of 9 percent.
After posting their highest quarterly earnings each, the two companies collectively bought back $8 billion worth of shares in the third quarter while keeping dividends flat, which could disappoint some investors, according to CNBC.
Shell said today that it is buying back $6 billion of its shares by late October, on the back of an $8.5 billion buyback plan that expired in the first half of the year.
In contrast, Shell did not raise its dividend from its current level of 25 cents a share, a 4% annual increase after a 60% cut during the Corona pandemic.
For its part, Total Energies announced a $2 billion buyback in the third quarter after buying $3 billion of its shares in the first half of the year.
And Total Energies announced an annual increase of 5% in the first quarterly dividend for this year to 0.69 euros per share. Today it said it would maintain that level for its second interim distribution for 2022.
Shares of Total Energies decreased by 2.1 percent, while “Shell” shares rose by 1.6 percent after the results were announced. They were up about 35 percent and 49 percent, respectively, in the past 12 months.
The buybacks of Europe’s two largest oil and gas companies by market value came the same week that Norway’s Equinor raised its dividend and share buyback guidance for 2022 by 30 percent to a total of about $13 billion.
Equinor announced Wednesday that its adjusted pre-tax profit rose to $17.6 billion in the second quarter from $4.6 billion a year earlier.
Smaller rival Repsol also announced an aggressive share buyback program Thursday, on the back of record profits that doubled in the first half.
