For the quarter ending December 31, the oil and gas giant reported adjusted earnings, which they define as net profit, of $3.66 billion, down from $7.31 billion the previous year. This figure was below the $4.09 billion that analysts from Vara Research had anticipated.
These disappointing results put additional pressure on CEO Wael Sawan, who is working on cutting costs and steering the company back to its most lucrative areas—oil, gas, and biofuels—while moving away from renewable energy.
In morning trading, Shell's shares rose by 0.25%, aligning closely with the blue-chip FTSE 100 index.
Looking ahead, Shell expects its capital expenditures for 2025 to dip below last year's $21 billion, with more details set to be revealed during its capital markets day in March.
For the entire year of 2024, Shell's profits dropped 16% to $23.72 billion. The major oil and gas companies saw a profit decline throughout 2024 after experiencing record earnings in the previous two years, as energy prices stabilized and oil demand weakened.
Shell's refining sector reported an adjusted loss of $229 million in the chemicals and products division, compared to a $29 million profit last year. Global refining margins took a hit due to decreased economic activity and the opening of new refineries in Asia and Africa.
In the fourth quarter, Shell operated its refineries at 76% capacity and anticipates increasing that to between 80-88% in the first quarter.
Additionally, Shell mentioned that there’s no set timeline for the arbitration proceedings concerning LNG supply from Venture Global's Calcasieu Pass facility. Venture Global, which had a disappointing $58 billion market debut last week, started generating revenue in 2022 when its first facility, Calcasieu Pass, began producing superchilled gas.
The facility is still in the commissioning phase. The drawn-out testing and optimization process before it can start commercial operations has caused contract disputes with clients like BP, Shell, and Italy's Edison due to the failure to deliver contracted cargoes.
Shell's Chief Financial Officer, Sinead Gorman, mentioned to reporters on Thursday that delaying those cargoes forces them to purchase more expensive spot cargoes to satisfy demand, which ultimately affects the end consumers.