Strong oil price supports Shell

Royal Dutch Shell has tapped into a surging oil price after hailing one of its “strongest ever quarters”.

The oil major reported underlying earnings, on a current cost of supply basis, of $5.6 billion (£4.4bn) for the three months to the end of September, an increase of 37 per cent on a year earlier. On a reported basis, earnings leapt 51 per cent to $5.57bn.

The group also said it would buy up to $2.5bn of shares in the second tranche of its buyback programme. It launched the share buyout plan in July, having promised the move to investors since acquiring rival BG Group in a bumper $54bn deal in 2016.

Shell – a major North Sea player – also said it was on track with its asset disposals, with the group focusing on a cost-cutting drive and a $30bn divestment initiative since the industry has been buffeted by the 2014 oil price slide.

Chief executive Ben van Beurden told investors: “Good operational delivery across all Shellbusinessesproducedone of our strongest-ever quarters, with cash flow from operations of $14.7bn, excluding working capital movements.

“Our strong financial performance allowed us to cover the cash dividend, interest payments, share buybacks and to further pay down debt.”

David Barclay, head of office at Brewin Dolphin Aberdeen, said: “The rising tide of the oil price has floated most, if not all, boats and Royal Dutch Shell is no different – the company has reported a near-doubling of income for the first nine months of 2018, compared to the same period last year.

“This was buoyed by increased oil, gas and LNG [liquefied natural gas] prices, and helped by improved trading at its Integrated Gas division.”

He added: “Lower margins in its downstream operations, deferred tax charges, and adverse currency fluctuations had a slight negative effect, but these results are strong nevertheless.”