LONDON (May 2): Shell reported first-quarter profit of US$7.7 billion (RM36.7 billion) on Thursday, sharply beating expectations after disruptions in the Red Sea and Russia lifted oil refining and trading.

The oil and gas company also said it will repurchase a further US$3.5 billion of its shares over the next three months, at a similar rate to the previous quarter. Its dividend remained unchanged.

"Shell delivered another quarter of strong operational and financial performance, demonstrating our continued focus on delivering more value with less emissions," CEO Wael Sawan said in a statement.

Analysts had expected first-quarter adjusted earnings of US$6.46 billion, against US$9.65 billion a year earlier. The company had posted US$7.3 billion in the fourth quarter of 2023, boosted by strong LNG trading results.

Shell's chemicals and products divisions, which include refining and oil trading, registered a more than threefold rise in adjusted earnings from the previous quarter to US$2.8 billion, driven by strong gains from trading and refining.

Refined oil product trading was boosted by disruptions to shipping in the Red Sea as well as outages at Russian refineries because of Ukrainian drone attacks in recent months, finance chief Sinead Gorman told reporters.

Shell also timed maintenance at its refineries to the last quarter of 2023 while most of its peers typically perform such work in the first quarter of the year, giving Shell a further advantage in supplying oil products such as gasoline and diesel, Gorman said.

Rivals Exxon Mobil, Chevron and TotalEnergies last week reported a drop in profits from a year earlier, reflecting a sharp downturn in natural gas prices after a warmer than usual Northern Hemisphere winter cut demand and pushed up inventories.

Shell shares were up 0.6% at 0713 GMT.

Strong LNG

Shell shares have gained about 14% this year, buoyed by Sawan's efforts to cut costs and focus the company on its most profitable operations. On Wednesday Reuters reported that Shell had exited China's power market.

Earnings at Shell's flagship liquefied natural gas (LNG) trading business were 7% below the previous quarter, when it had bumper trading results, but they still beat expectations.

"Another strong quarter for Shell, with its crown jewel in the integrated gas segment reporting results well ahead of market expectations, similar to what we saw last quarter," RBC Capital Markets analyst Biraj Borkhataria said.

Shell's LNG production rose in the quarter by 7% from the previous three months to 7.58 million metric tonnes while sales dropped by 7% to 16.87 million tonnes.

The company's overall oil and gas production rose by 3% in the quarter to 2.91 million barrels of oil equivalent per day.