(Alliance News) - Shell PLC on Thursday announced a swing to a net profit in the third quarter compared to a year ago, but the profit fell behind the second quarter as it warned of volatility in global energy markets.

The oil major reported a net profit totalling USD6.74 billion in the third quarter, after oil prices surged, improving from a loss after tax of USD447 million in the same period last year.

The latest profit was however far lower when compared with its second-quarter net profit of USD18.04 billion. Shell alerted the market on the comparison earlier this month, blaming the drop on a slump in refining margins.

Shell shares rose 3.2% to 2,373.50 pence each in London on Thursday morning.

Shell declared a third-quarter dividend of 25 US cents, unchanged from the second quarter and slightly up from 24 US cents a year ago. The company aims to increase the dividend per share by about 15% for the fourth quarter of 2022, subject to board approval.

Flush with cash, Shell said it will buy back USD4 billion of its shares, after completing a USD6 billion share buyback announced in July. It expects to complete its USD4 billion share buyback to complete by February 2, the day it will release its 2022 results.

Although oil and gas prices have surged from a year ago following the invasion of Ukraine by major energy producer Russia, hydrocarbon values are cooling as the northern hemisphere experiences mild temperatures and countries shore up supplies.

Third quarter production was at 2.8 million barrels of oil equivalent per day, down 9.8% from 3.1 million a year ago, and 4.6% lower than 2.9 million in the second quarter.

By division, Shell reported adjusted earnings of USD5.90 billion from Upstream in the third quarter, up 20% from USD4.91 billion in the second quarter. Integrated Gas adjusted earnings were USD2.32 billion, down 38% from USD3.76 billion a quarter ago.

Chief Executive Ben van Beurden said: "We are delivering robust results at a time of ongoing volatility in global energy markets. We continue to strengthen Shell's portfolio through disciplined investment and transform the company for a low-carbon future. At the same time we are working closely with governments and customers to address their short and long-term energy needs."

Shell last month announced that van Beurden will step down as CEO at the end of the year, as the energy major looks to reinvent itself under Wael Sawan, who has served as director of Shell's Integrated Gas, Renewables & Energy Solutions unit since October 2021.

By Tom Budszus; tombudszus@alliancenews.com

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