Important information: The value of investments and the income from them can go down as well as up, so you may get back less than you invest.

WHEN Shell (RDSB) gives its fourth quarter update on Thursday, I will be hoping for more news on the share buyback programme that, the oil major promised, would continue “at pace” in 2022. Despite mixed results in the third quarter, Shell said the sale proceeds from the disposal of its Permian Basin business would be used to reward shareholders.

The company announced the return of $1.5 billion from the sale to investors in December, with the remaining $5.5 billion to “be distributed in the form of share buybacks at pace”.

It’s all part of the oil major’s charm offensive to prove that it can generate value for shareholders from the transition to cleaner energy. And comes amid a period of ongoing change at the Anglo-Dutch group.

There is the move from the Netherlands to the UK, which is to be the base for its new headquarters as well as the introduction of a new, simplified share structure. And all against a tense trading backdrop, which saw it forced to buy from the spot market as gas prices reached record highs.

Shell, the world’s largest trader of liquefied natural gas, said trading results from its integrated gas business were expected to be “significantly higher compared to the third quarter 2021”. And that is despite the fact that it is still awaiting the reopening of its giant liquefied natural gas vessel, Prelude, floating off the coast of Western Australia, which was hit by a power outage in early December, which is expected to remain shut until at least late February.

However, Shell has already warned that cash flow from operations in the gas division are likely to be hit by the high margin payments it had to make due to price volatility. Refining margins have also been hit by prolonged maintenance work at its Scotford refinery in Canada and the ongoing impact felt after last summer’s Hurricane Ida in the Gulf of Mexico.

As a result, oil trading and refining earnings are expected to be “significantly lower” than in the third quarter, Shell has said.

Plain-sailing it has not been for Shell, of late. And all the while it remains under very close scrutiny over its green credentials, with that 2030 deadline to reduce its carbon emissions by 45%, mandated by the Dutch courts, creeping ever closer.

Shell’s Q4 2021 results are due out on Thursday 3 February.

More on Shell.

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