SHEL - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Sinead Gorman

Welcome to our first quarter 2022 results presentation.

Before I look at our performance, I would like to thank Jessica Uhl, who is leaving Shell after 17 years. Her distinguished Shell career culminated in five years as Chief Financial Officer, and she leaves an impressive legacy. She has been key in strengthening Shell’s financial position, whilst delivering some of the industry’s best cash flows year after year. And I am honored and excited to follow in her footsteps. about developments, talk our delivery will performance. QX I our strategy key and Today,

continues Shell’s there in ensure war the As Ukraine of efforts. staff relief the working our and support contractors and safety to hard

We are retail in country the to supplies sites moving. operating and our doing utmost keep

care offering are means assistance We taking for our fleeing staff relocation. in staff our supporting and the and Ukraine of war by

withdraw We manner. from our have to all phased intention in hydrocarbons Russian a announced

oil crude will and natural So, long-term we Russian have spot we buying LNG or and contracts. the not liquefied on stopped gas any market renew

We have spot cargoes of Russia. products of refined also stopped from directly exported purchases

gas quarter $X.X activities. charges of first have we of the billion taken to around relation post-tax and For in XXXX, oil Russian

the energy suppliers. customers market must a affordable causing led and be engagement As has managed supplies about and government, tragedy, to shows global prices. and uncertainty well The in through energy rising as war secure, reliable disruption deep human with

a be through natural and have We to Qatar. shipping built world. is we supplier continue are signed we that history One continuing to needed Pearl it the of LNG, Shell’s XXXX, most. at budget, have just in in largest world’s secure QX the completed safely, supply terminal In ship on as is agreement the LNG And Germany. example energy to largest time will where the gas the we across on of turnaround in deliver

power our the bids truly energy At This additional to of PowerNap, week, also mid-April. USA platforms. our they energy. the large-scale includes represent on in gas Prelude renewable is Together, offshore group, India’s projects. in of to up announced develop and since And one last transition with the the Additionally, back we are time, gigawatts carbon our positions first-movers one we we Shell just of low integrated and have Sprng supplying and floating successfully a business as Colibri successful generation Energy partners building leading accelerating same and total UK. of oil capacity. This wind together deal acquisition X.X farms the transition Mero-X in started line India. LNG volumes

supply by While deliver be are form XXXX. targets we secure of a progress to net-zero the of our also energy, emissions we that meeting powering business energy a part strategy climate

So, compared by the we the of sell achieved to short-term the we energy XXXX, end of our with target X.X% reduce carbon net products XXXX. by intensity

an energy absolute bold As operations, has XXXX emissions and compared net including to producer, XX% users by its energy target a user and XXXX to set levels. from reduce the Shell of buyers by

our of good outlines towards advisory Transition vote an at Shell recently Progress are our XX% compared Annual Report progress against with be the to our strategy The at progress XXXX Meeting We and will target reduction Energy this making month. with this published end put XXXX. strong General an

strong macro Turning QX amid was to This and Shell XXXX geopolitical volatile the quarter conditions. our for performance.

disclosures by time, growth cash reporting flow outflow about to activities the Our our benefits transparency $XXX & are the working adjusted or market including as of first strong more more adjusted separate enhanced as and EBITDA of included Renewables delivered all segment and million, rising a million Solutions, offer well operations, primarily for $XX.X the we billion. of we the of some as driven have seasonality. RES. this pillar. our commodity results from These $XX exceptional delivered our adjusted of was $XXX earnings earnings In integration capital RES, We Starting which environment we quarter, than adjusted our trading billion, businesses, billion of Energy which to and were prices. billion $X.X optimization of reflect EBITDA $X.X due across

insights find book, the informative all segmentation can available on video quarterly additional the shell.com. group into data in disclosures and and new in the You

X% Also, by are we dividend previously as quarter, shares. announced. our we’ve made in increasing This some buying substantial back progress

planned of The XXXX. remaining program results the half for billion announcement. buyback of now $X.X total is before have the to first our $X share We QX $X.X completed expected completed billion of billion be

strengthened This billion. sheet quarter, our debt we have by further reducing net balance to $XX.X

billion CapEx will the our flows, healthy and to also Company. will gives We balance energy billion our provide a investments investment $XX transition. our $XX Including the foundation in strategy disciplined XXXX. delivery energy whilst CapEx invest security to sheet with Sprng our stay energy solid in continued range the the remain to incremental a cash any within us will of accelerate transition and for Energy, and be cash Strong disciplined safeguarding

macroeconomic the of current expect subject to XX% we second the distributing be more outlook, in CFFO the half With to approval. our than year, Board of

details provide on announcement. more capital our our will We at QX allocation framework results

a play to the in Thank energy Our and energy delivery demonstrates to leading transition intend you. security world’s role this low-carbon system. quarter we

Unidentified Company Representative

Instructions] [Operator

Sinead Gorman

just Thank and question, whilst Today, energy how and that, security while you in one each, macro first Ben, so opportunity? have and your Wael the could questions, navigating Cecilia? today. I the has Russian-related showed transition energy to answering please, with we sanctions, And the the to us questions restrictions. a address or not for Please, in We we everyone hope invest environment. continue joining due will presentation have we’ll geopolitical be could we complex two

Operator

Sinead. Thank you,

Oswald from ahead. We question will first go the take Clint Please from Bernstein. now

Oswald Clint

portfolio. Thank the everyone. perhaps the two one afternoon, very questions, Yes, first much. and gas Good Yes. on on one second you power the

or hand implications. long-term LNG actually not could see, brought bit been forward years you’ve moving think see a have few possible the something And has European video terms gas that’s contract? possible to some a be actually options. from that question Germany. to that on we European a corporate or sign in could you And to a gas, that see nimble talk that, Energy I wanted But governments. you’re Wael and second detail been of could And my Perhaps ask you’ve up XX- LNG talks was this here of with engaging lot QGC XX-year one. course, you’re with please? MoU looks have It Sprng construction. didn’t and I Shell the really of ago into on but a Just faster just about how under going I government natural in with I just forward pre-FID a India. obviously question big like little about may

you what sure integrated, makes but as and Sinead -- truly curious at financial looking explain you’re like to candidates from the mentioned the it look her just aspects, comments? at about So, you I’m hundreds, if criteria this. in could select apart

Sinead Gorman

mind, in Wael, Oswald. But I’ll Thanks, to Two of you pass think stroke, there. three if you. them, over I questions both don’t

Wael Sawan

of have Eastern into general, is don’t the Of European necessarily Oswald, but concentrated some question. not Brunsbüttel Europe well. countries now terminals on simply an to necessarily Northwest moved to the thank Germany. of they’re we’ve now, Sinead. sign some interconnectors it’s where with you course. starting the first and, the terminal of Maybe in Indeed, Thanks, gas. potentially places we have one of agreement course, to Europe, natural shortages in the short important import the it’s as And that for in right around recognize where you

infrastructure that go. importation energy difficult to how able do But Europe be the security And be to the at are We contracts going -- so, here. given it’s to the Europe. sort knows moment puzzle, it’s truly right to we looking of to do the the anyone I of see the do arteries think overall part create at of to that. it’s Who into how in term you going have critical a you it’s if need all

some entities perspective into do a that to So, think, void. whether you’re But, you’re going I’m attract private to longer-term to not speculate to step have or that. of going to if as volumes, going from government see I

the we that first annum You million Global LNG taken touched where that. Global signed to adds tons on X flag already with we’re up export that facility LNG per with of part sort going on X want and Venture that I had from as do million the Calcasieu. to Venture question from from Plaquemines of

for I NLNG use? context on I think portfolio of trains, and continue are two Canada incredibly and portfolio some that likes the integrated gives us world. If LNG think unique of volumes, just leading portfolio, these provide first to build the energy, the the with criteria to makes opportunities on touch so our by the us what spring think great X, some that likes And to the maybe spring. reach in add Train gas I this to I are global we

and Why the a in largest creating world. ambitiously one? the excited back. to opportunity country like on did play welcomes I country foreign this that renewables from investment, incredibly perspective market targets. think is customer firstly, energy that have we in value the the And in moving in the a third We start of to

We have to hydrogen. in of maybe able India, saving gas and have future to power, in able have customers a be of particularly power, that be to number want want with C&I they and to customers XX-hour green

over bring in capacity gigawatts a team of markets, also X.X some I of have of the foundational value towards we north X and demonstrated give able C&I that achieve utility With build to XXX us capability, and serving XX% to And integrated the chains. we and us returns course, gigawatt in beyond and supplier. expertise that, people So, another that. platform, we we bring funnel have in that this be We more on capability need hone which contracted real allows to that to we we sight of line that. will platform also into a add, of more be these able operated demonstrated immediately, of terms think

fronts? the expect? So, does show I’d buy the can this make And right pathway give want? proposition returns would on code? was the it a us at yes. it achieving an And to answer price are, what is value those course, of our it going say, overall attractive in Does finally, the we key it all sort customers ZIP towards that’s of The elements we

went why that’s with so, it. we And forward

Operator

comes from Barclays. the The Lydia on ahead. go to move from ahead. next question Please We next Rainforth go Borkhataria question RBC. from Biraj Please from should

Biraj Borkhataria

questions. Two there. Hi,

second of your XXXX, times with this to U.S. your more And your from at this to volatility periods, actually cash significant both looking before, than peers benefit observation, combined. before and by was volatility. generating actually that two cash competitors be happened quarter had you wanted lot seem in billion, and and you free the you’re more flow of two quarter to one, than quarter it a start this $XX where has then able the underlying happened First flow

trading. is question my on So,

LNG. LNG the Sakhalin there out rough products a guide? and still a taken term? the your from Shell In now exporting, oil ROACE guidance the ROACE talked to earnings. about question typically flow One will and the Just your X% trading it has help can I intuitively in medium near-term electricity, by effectively And of understated kind across amount? feels on For improvement on higher gas, any on there should as presumably, comment Sakhalin still your you. peers X% the appreciate is regular second Thank to a guide how think and about to quantify. that of provide guidance. the Is you’ve that. it’s than over quantify be on what and trading contracted the trying like where through as to in But very is you then, difficult basis, or of you’re it

Sinead Gorman

Thanks, and I’ll Wael, I’ll to pass first the second you. the Excellent. one take one Biraj.

excellent where part hits pipeline for results you different anything I Wael won’t of would which as thank that. flow comment the moving about, the heard our course, our strong the that about whether products particularly sales. all team course, we cash chemicals that’s very this very had talk to our I’d well. But Fundamentally, the coming and So, on well, EBITDA RES results, would particularly quarter for which this seen this I of as thank you’d what billion have on integration the an across off-take our terms side side, the competitors say, an say of on trading job comments of talked on the always move it wards, we $X.X integrative you an all of gas, derivative and as you’ve And fair optimization $XX and as in quarter, at gas plays our trading you EBITDA the or side. across billion adjusted our and for you power question. strong what But of in echo this likes and a that or particularly some of expect. you And It of through portfolio. in is it’s help year that towards also of area, helps there. product business the did would our CFFO, but around looking specifically course, the about, in course, on have terms seen we’ve through flows us. from it’s from all is integrated that, elements, of how in upstream whether Brazil, through is in into

close see Now, see. Wael? the drive you to to our very fundamentally, the assets, to will we some business continue continue of results trading stay that

Wael Sawan

second quarter. a roughly the comes simple barrels on I’ll X.X a Sinead. it XX,XXX as In Thanks, Yes. been out keep for has us quarter. of and tons Sakhalin. delivering million day That it essence,

of you no terms it. see In longer will

guidance, say through from to until to normal to hope plays of it. course, soon that they’ll X.X -- about will X.X able million of the out be course, talk which flow million financials, dividend essentially, that comes we And when the there net X of totally that -- are flow million tons when I’d is which of taking So, it it, we tons, is into we out Sakhalin. get

Operator

question Next Irene Generale. from Please go Himona ahead. from Societe is

Irene Himona

following disclosures today. Both marketing, my are new your questions on

also particularly COVID Obviously, So lubricants various XX% prices you’ve now you efforts on on, can with adjusted firstly, look in year-on-year, except a if lockdowns, demand pass about I down talk margins. when that. mobility’s XX%. at wonder, but before time I QX, earnings to down limit are lag there there’s the seen you trends can they’re on your government

And some year? so of quarter the when share mobility you flow history billion cash So, you earnings to then, flows across QX seeing the in negative QX? recovery today global you the marketing. in cash us It’s had in lubricants, And in any a for Shell free gave far $X you quarter. negative that. portfolio, marketing the of XX-quarter the care are third Importantly, guidance only free rest

So, any year. rest guidance the would be for the you. very of useful Thank

Sinead Gorman

Irene, in great well. you. as questions there Thank

So, the down some towards going I’m look as look of I questions. just to

right. you’re So,

marketing terms as et China, a some particularly volumes, driving of seeing But the cetera. but I’m terms really In It’s in pleased, see of a are of always effect in great about team of bit the elements terms lubricants we course, of the of however, job a down. knock-on little is when and you of results. knock-on et season, cetera. impact the Yes seasonality, look in COVID, struggle doing there. we also, those at demand, margins around course, are strong

as as billion what you negative you $X there. was specifically, flagged the asked flow of around Now, about free cash well

capital. it’s Now all remember, this of of in area, working course, our about sort

we eight terms So, really fact of that course, lubes, prices But that’s the around back of more fantastic you’re protected an I have through. And what think of a the to world of in that’s customers million of flow like we One just course, well. would in business. X there. set expect by this, serve Shell lubes you are lubricants. I’d than bring you and that And strong results as course seeing incredibly machines

I hope a bit So, look helps the that forward. with little

Operator

Lydia go please Rainforth Barclays, ahead. from

Lydia Rainforth

over are to are things changed energy anything to than difficulty I Russia decades. on Two been the looking cash just buybacks? you’re Because questions the at the levels that come that at want And back stakeholders? are from Ukraine one, different they’ve and side, I seeing mean, invasion. other and then, -- if or within second through If could. how highest picture I prices strategy? Shell Has doing additional clearly, you amongst big with that just accelerating the especially I there

in you just different different So balance terms stakeholders? of of perspectives how Thanks.

Sinead Gorman

that Thank you. in. we Thanks great and back get could you Lydia,

on about I cash? take Sorry one first you Ben, previously. the I’ll the then suggest second can take issue and the one

Ben van Beurden

the of for maybe answer has is nothing sure. short questions. Yes, the Lydia Well, Thanks changed. the the version

circumstances still strategy right of facing. that mind Our of in are for that we the we with you have that We I more crisis to the that strategy to solutions, course, a need to execute. definitely facing. bear it’s we cleaner also the and purpose very exactly energy what being cleaner energy, strategy Company response the is want And, much believe that we energy we needs, the a need is and energy. But providing more are world need more security. also the

in say therefore We performance share of macro that been be the by has this at course, quarter, I stronger energy also talked impacted much the can also in we about a that can Ukraine. seen buybacks run light. macro the course, also operational what helped the change. are been is transition quarter. maybe same this portfolio. and strengthening by that of the Well, But seeing the was we’re macro seeing, war a in has performance to And So, already the the up time, the better in

in We So, better necessarily do from benefit yes, it’s we coming have our sense And will windfall that a performance. company, indeed, Ukraine shareholders have from do as well. that better not a the war.

Sinead Gorman

Lydia, Ben. deal around different your with was balance question we second with cash. stakeholders, how And really that Thanks,

is Of mechanisms in difficult course, of to we that our this customers. a course, have think ensure we And time. to first we is place. have foremost, some have about What done and there support

of the worth put support. of of pounds So, example, in cost millions if we UK as we’ve issues of to some of the funds I to course, of those where to an look energy, able seeing terms be are place in

much sure as that well. make for also et like we we just timing are payments things at holidays, looking bills, customers be as there can to as cetera, We’re the of

particularly, the if is wisely, of in we it about Beyond course, fundamentally. our And the again, dollars about transition UK, take sure to invest. I to that, and making continuing investing it spend continue to

spend So capital keeping and, before, within of making discipline the sure that course, that we of we’re $XX very-focused on money talked billion to about billion. $XX where we

at if of our can as you we of at our distributing second same half this in of we then excess be it trying going coming also year balance stability the on time, really see, dividends to that the we to you in have know, of and the firm about to CFFO, well, to course, shareholders, talk up but through there’s that, the good well. then and we And balance as also see as said and Beyond that as that sheet, take progressive through that we’ve we’re so sheet. the XX% expect the

course, Of saw Thanks, Lydia. next you one, great. have was $XX.X to which Cecilia, go debt down could we the net billion the please?

Operator

Della from G.S. go Next from Please question comes Michele Vigna ahead.

Michele Della Vigna

Two questions, may. if I

can special there you of the dividend. liquidity form increase And of given second how a business of half to to in five-year over EBITDA where in buyback on limit to a give mean outlook $XXX market cash start to million the line, in quarter, Thank three- if a new that from your long-term very per quarter. you. solutions the the I strong entail current billion CFFO, important strong such may EBITDA, and was may renewables you and could the was some us macro in to wondering whether clearly over need I return buyback is XX% the much First But secondly, execute if very to And an endures, of which $X at for environment grow shareholders if expect contribution you a also welcome in wondering trading. energy strategy?

Sinead Gorman

taking second mind the one? one. I’ll the Wael, take first would you

Wael Sawan

thank the and Sinead, you Thanks, course. for Of Michele, question.

these healthy be and But, able $X.X to of very the demand where of RES as course, QX course, both of the strong course, and, a a macro helped times nice perspective. reporting start are quarter be Of well. of to to significantly billion has EBITDA. seasonality with it’s trading tends from

we’re larger over we What mean, contribution. of what a to stage I able And there’s recognize, get years. lot is that also time, European the at largest the really portion coming and many call, over over traders of build to the what important giving that the going not desk can the on. become I are job. as in outlook foundations looking of transparency, say find capacity gas be We’re a of is to to RES power the that that be I we are Trading it’s Pleasingly, overall is, this the progress trading one to at well. as U.S. this the coming been doing years. building in you would to is fantastic we will area and But assets, we our bring of will spending continue an

latter in has part becomes, the scheme where towards of going they’re the of trajectory that few I So, it the much decade where is hopefully we of next sorts bigger an with we the years, on. proud this the the done sort building of and going cash that contribution a the think, foundation what pleased more of to are expect that area of to meaningful for very the be but is flow team things, generate the contributions returns,

Sinead Gorman

Michele, than the returns and And, XX%. cash asked specifically you about more

results of course, to to fully you be go So, in detail. QX come and more into the intend to able back we

first do back details. in how the not that speculate in we But up you a the already there we’ll of where would also So, say, of I billion we more we’ve on doing we course, limit of talked with come What end half that. But terms $X.X to buybacks. lot of is won’t whether would for a or billion is about the buybacks. $X much I will terms asked done

at does that things of the in have can a to for that see allow terms the we the In saying buybacks, we the We out AGM, in is you’ll so results we with. technical that course, $X.X expect of the billion buyback. off-market do. resolution of effect we remaining limit one the complete share to that hitting see QX are mean come before But to

to to Amsterdam broader like of to into shares buy to back. places go go and us able be a other allows excess variety it markets So,

Thank bit well. we’ll to us with QX gives a as results. up, we flexibility So, back you go that little you. the at more come Rounded as more

Operator

is from question Patricot Next ahead. from Please UBS. go Henri

Henri Patricot

I of please. questions, have couple

first opening the you remaining for range the and this the comments to on within range. cash billion year. one remarks this about The in appreciate the the talked lower you billion I CapEx end with CapEx $XX made $XX of

So, are when we the talking middle any And range more of the security in around energy thing this mentioned CapEx, like incremental energy is and the second on CapEx you now? that transition.

So, does see that a mean that you much side, around low carbon, we the focus then, some refining finally, more around also have some and is the the And question very gas LNG? where or still just can on to the second utilization quarter. change there’s half Thank a been of quite that And given the see increase the maintenance that where you. of we do Should second lot stabilizing in in year? the in portfolio? you expect

Sinead Gorman

you. Thank

was was I which one couple first effective around take. will the And really I of a CapEx, of LNG, So, questions think, around third two, I think there, it? really utilization the

Ben van Beurden

Refining.

Sinead Gorman

Ben, ask if you sorry. Refining, I’ll mind. you don’t

Sorry, there, I catch quite Henri. didn’t

So, to CapEx, the with respect yes.

capital terms has of in clear, of been framework. very nothing terms -- In changed our we’ve allocation

remain disciplined, remains $XX of about. To billion the give as the seen that which will just remain $XX And billion. Wael example that you’ve of course, $XX is we an billion talked We just to acquisition, actually within billion Sprng the within to $XX well. will and

So, staying that disciplined within range.

at more terms of we correct we’re terms are transition. energy focusing But it, available looking to opportunities the of In in on that security are will that we energy where and the spend us. in terms you’re of

example come that as see you’ll of So, And Sprng is that a well. through. super

Ben van Beurden

for And refining, is Yes. indeed on a typically quarter Henri, maintenance QX it’s refining.

as a fact, well large did matter turnaround very a we Pernis. As in have in QX of

you that that our sense. seasonality will to be But, take maintenance utilization. results see we which QX, why strategies. some a is our in more, I judging there QX hope and account that’s just in have -- into makes that in that also So, QX normal

our which and changes There said but core question portfolio. just bring will stability to chemical are would the in X second portfolio part refining Now, of about refineries our of no not We energy was parks. strategy refinery the there. be the back sites, we the

we on and where that as investments use also So, strong for benefit hydrogen also later platform even integration of we sites a have synfuel biofuel where investments, have investments. we and the can

refinery, We’re yet. divested. still One with There’s our in the That are few they’re almost Rosneft. clear. second out. in that done the X we how that German was are done PCK process not or But but a quite were was all with at we will see of have being Schwedt. to the plays almost go, And very refineries to preempted sale intentions by now, that

We will will and our energy back chemical be X X bring portfolio of these then part to refineries, which parks.

Operator

Lucas Next Please go Herrmann question comes ahead. from Exane. from

Lucas Herrmann

opportunity. the Sinead, Thanks might. thanks for very crew. much to and welcome And the Two, I if

cash we’re able rate. the question -- should were dividend is, grow you clearly think the much, or a of reduction at base The world which very the growth guess, about for? of at dislocation dramatically. rate given and product how think ago, elevation long my and refinery, the a that date? dividend us time we’re give you just period? markets much albeit level obviously seeing, differ it. much. the product, redeeming at absolute to The first, Can than Thanks dividends about today about shares we sensible how perhaps and rise how arrival you do where on should Shell you this think how XX redeem dividend I about moment, is a of as we And later or case. -- this and But you’re very dislocation was secondly, on about the margin Europe to you’re the pace at that the advice seems the guidance manages give simply, any forth of X% can level at is clearly to shouldn’t seeing How at that might you’re the -- relative you the it’s something ask extend pace you’re retaining to I rebasing growth for more so the the this QX. so excuse the potential a and I planning faster we thinking volatility Perhaps months going in expect particularly or future to in in and consequence. how stock

Sinead Gorman

for really welcome and Two Lucas, there. I you, appreciate crew. Thank it. the the questions thank to you much

The second through. of in And product the take. I’ll okay, in you’re Ben, dividend, first if one coming the of terms take terms the one

on So, I’m this. think on you one, first I come to the predict where Lucas, going

more terms distribution in XX% We coming the expect had more dividend QX in as well. buybacks XXXX. that And to those exceeding than of course, are see But QX of you results information we through. in QX at give know, as moment we and will,

is buybacks it a actually have with the But the later. hitting hopefully, pace, will more limit Ben? significant we’re more our that for on period. as we’re moment. we look next like the space But say, technical on at it So, as that well, does the doing you AGM,

Ben van Beurden

absolutely. Yes, Thanks, the question. Lucas, for

And dislocated a come Russian to cetera. also that a of is of take crucially I Bear takes some refining predominantly and up by time quite also logical to to will indeed, which, heavy the go I fill products to that think refineries back don’t will for to et an optimization. out. all for different the dislocations it’s think States are going fill rebalance now places capacity it Russian would of components running Russian product disruption to in available that disrupted. barrel that time markets Think we this go shipping the it things of absolutely products not used. that are a call also mind, out not these happening in time. well. places some yet. the pan from It at where up being on light take some course, but to different Shell’s for is to shippers, impacted are in by of the that settle as is bit around stabilized It dramatic now typically fleets, point this. bottom United early free matter the time result Russian also of, products the having It’s nevertheless also refined places, that is the oil All the then, been going just how the market to traditionally would as it’s to and operations. have It crude way, anymore to to are being otherwise are the market And exactly

word. chemical and to for So, to factors traditional settles. for matter I I I more predict I expect that this higher in reverting predict reason it period, probably a that again of take settles, will therefore, historical where when remains it some markets of know And back concentrate the energy refiners. if -- and also that be footprint time no cracks But the cracks X our difficult think that But back reverting and and to that course, still more there us we it see refining normal settles, to is, just we to because I strategy And ultimately, of which see will because that mentioned. parks. will give is course, to is our it rent is strategy

Operator

from Paul is Cheng question Scotiabank. from Please Next ahead. go

Paul Cheng

Also, decision to reduce on as feedstock Two the if do to replacement. maintenance second that the have European or questions, But mentioned downtime. have so somewhat at have a such, Ben, the lower total to you because if low of low just on the in impact decide you fund please. crew to the to and run is it -- run the price optimum some the impacted sanction matter you some that the least that, I or natural there a rate, activity way? on may operation at any a solely as heavy somewhat that based So, was is due driven you or there refinery curious one well impact want the see gas market Russian maintenance earlier is quarter economics, that that guys as the your just by difficulty high condition.

appreciate into you price just rising a net to see, you environment, would fixed it is you, hurt that your that want segment got a I renewable that you separate then how it or business. the benefit really contract want generally appreciate just earnings? works. as to finally, And first dynamic there. to PPA? it. understand comment to renewable probably guys Is want given and some So, question second that that have provide to electricity price In how out power I or the business I translates the break information be really company The

Sinead Gorman

Thanks, say segmentation. RES that upfront. Paul. have Thank to you on for the the appreciation I

the We’re first and appreciate glad Wael? Ben, one you on then transparency. this

Ben van Beurden

impact cargoes Contrary short-term when forgo what refining our an many to do in had right. buying we open the other you’re actually on our as Paul, basically is term. system the on well to short absolutely. market, we There relatively players refineries crude Yes, market. program

of crude short most actually spot on buy That’s have But, business. optimize market. the therefore, does whole and or is That more integrated optimization transactions us idea term. better. means spot that refining that and behind for So, our more to we our that interventions the indeed mean allows we it system the trading

quarter and stop, crude the had our stop, under-load longer. instance, on We Now, to for market. stop for buying else particularly Europe we what with that euros, you saw to to up trade Sea in or months the fill loading are where in refineries, routes that Black would from it cannot in you wanted buying that go a indeed And and the coming the spot we somewhere because quarter, Russian had we weeks is term. only first the first to in meant crude

of we run we is us potentially which therefore, Schwedt, back number So, different course, of the loading way. capacity, that’s at supplied one. exception behind Russia, easily, I a by are the that’s point up cannot PCK -- our but refineries full Druzhba now. pipeline particularly And pipeline. at in We But a European from think

the at the turned be together euros. quite for else incoming ways is that the down with because We’re that refinery will German anything are will for mean constrained significantly logistics configured that, doing probably but and looking not government. that refinery But

but of it be most that and us. Rheinland actually, impact, the will So, Pernis, that’s all behind

Sinead Gorman

Wael? Ben. Thanks,

Wael Sawan

Sinead And the Sinead. And the the, thank as question. for appreciation for said, Paul, breakout. Thanks, for the thanks you

we’ll think as more be this details we on able journey I provide together. to RES go

the think, to of first, is price, recognize this power very, local structures contract. we I very on think need I that

for or whether this whether operating the quarter. U.S. And the fundamentally different the on within presence So, past playing see. which are that our we’re important course, structures typically we essence, world which an purchase do results hedge. PPAs, in and to have even many a in way are we of you’re the power have When to are which of offtake across all transactions, through the way at contracts we And agreements, on and then do of that we the we sales have the was contributor our work business Australia, ERCOT physical PJM, is realized we fixed Those on prices. prices those the moment. it’s recognize course, CAISO, U.S. look of to the you’re you’re to we important that now

current benefits enjoy minimize exposure price have. of the So, some some risk, we take upside. choicefully of But the look which, really to of the we merchant we can course, that

PPA I the it’s And I choose of then, merchant that to would that market specific that would And so, market. dependent, related is it is we split very in secondly, say much versus what say firstly.

Operator

ahead. Peter Low go please from Redburn,

Peter Low

my questions. taking for Thanks

billion first XXXX. that guidance example, gave on $X think I for to you CapEx you still and And billion guided to whether Q of was just holds. level the The some of for $X divisional spending in marketing,

don’t suffered than that secondly, that optimization. and And trading anything fully LNG on in your the think us to places supply to it anywhere divisions? the rest different which of give indeed had Trinidad Can that might reallocated ramp perhaps you some an year, the up the in strong last have would You’ve Is XX% was first back, still from done Thanks. quarter. a resolved. some if year cause of you the have or any? and quarter are of and between are Nigeria, significantly have there from you update perhaps supply disruptions CapEx then, world of that less for you all But come I in outages, else that LNG been like where there

Sinead Gorman

Wael... and take Thanks, I’ll Peter. one Great the first questions, twofold and there.

Wael Sawan

Of course.

Sinead Gorman

Thank you.

in allocation framework, what of I So, -- it’s our say would not is in of terms the capital changed. terms

We’re to to with across billion. $XX would intend course, think lot it in its just that, while quite as earlier, to Sprng billion remain allocation they gave as an within And to our instance, you as a that within allow know, strategy. say, in time our we very the that. and within I a We, the terms well. example are for But the as through. is flexibility disciplined I returns to comfortable do And of live if $XX come. I correct framework QX, segments fits Peter, financial take And the come overall a of things develop of acquisition

it you see take an going as at QX remains to use away wouldn’t I is So, all as will of indication Message is. framework what through.

Wael Sawan

you, question. thank and Peter, the Sinead, Thanks, for

strong with acknowledgment started was a was a LNG it Indeed, the given the that. of we off. very strong level quarter. and us tying volatility to within after for to some that window performance recognize has saw the saw hands you their of we decision traders. make You by at And quarter the that Thank important bit until volatility significant operate that able be top this we that a the safer of the sure to

to really than of remember point results talk a So, when trading and lot good think about to again of an chain that the really trading. optimization by And we is important naked sort team. it that’s more And here, I make. optimization supply important

the picture. You asked supply around

course, down. through of So, of were up Nigeria as Trinidad Those we and heart in of the Tobago. of now And month the of some December at both Prelude April. of was is and have indeed Prelude improvements seen challenges. middle the continued

an security which, we helped, which has So of challenges course, Trinidad project of last not that’s production. to in upstream Nigeria been to And The multiple is is the has running. of challenges, least Nigerian with gas supplies real on to see But continue us continue bringing Barracuda, year clearly, improve. country. the course,

on that’s that’s now ramping of capacity. ramped to another Late process we And as up. Colibri. in So, full helped it’s the project, up March, brought

some longer And where sustainability. the the of project some of a forward have to That So to will more look structurally we add Manatee. hopefully we will that there. called shortage term fix the

the remind to at I’ll a least the -- So which half which majority second ago, of just is to few of continuing right at achieve. these really of end we we second on some able what be now track to quarter, and the issues least we you months to the improvement, see said extent, until are

Sinead Gorman

Wael. Thanks,

Operator

please of go Bank ahead. America, Christopher Kuplent from

Christopher Kuplent

about in Russia. there. that to Let something two Europe’s a about to you think structurally and Penn downstream achieve I How wonder little independence? policymakers start looks to it. advantaged when get to us your thanks. strategy. is I you well I’m Chem, Europe? as you there there But are And that response highlighted think Europe to course, as like prices are how to Many your as projects much global not asking talk defend me term? energy more perhaps a your that putting from you’re portfolio? in more consumer consider Europe? way How to is And of I Europe what in you now What important even an to can resetting which can what questions you And me by medium But, questions they So, excited, around bit energy going probably of do trying therefore, about Ben, is is are two independence your you, in the tax there. whether gas you can in as fast we’re not message perhaps downstream means Energy windfall quickly right think

Sinead Gorman

you. away with you Ben? let Thank Chris. it, We’ll

Ben van Beurden

us Okay. the lever, Quite ways mindful could the talking that we over be politically are you a awful elected can have this to you those you countries. these for not is so few for multiple be last Well, make you thank appropriate in and decided doing. or been can in please but has been lot to here much which say been particular But, out a levers way very we with my to levels at understand there to leadership. what to, different else. pull, consistently consequence I that really think want to that It’s policymakers imagine, you as whatever Chris, not be you Europe’s message to actually months can good questions. And a needs or few clear things Europe talk highest do are or and What that are very sure a pull needs good point decision the have way. it, by that pull if this of you’re

I which way you very have in what a has acted so to is measured and think, true will believe think, that Europe, objectively I far seen probably the is also crisis. I

call measured Of We have to and more on that course, for but acted some, Europe enough. so controlled do that is in very believe not also should way. done I on, have et must more And European realize But -- Russian gas. crude Russian it’s leaders even and oil that’s a I cetera. not we say in despite Turkey because tough go -- then, very

currently regasification inevitably will just liquefaction no an more midterm more from I story. that measures about energy can to into we And we gas and actually, things being the talked measures market, -- are have on methods yes, sensible market, Northern transition bring unfeasible. pipeline more Russian which way to and focus is the somehow acceleration pipeline into happening. crude let’s the about, Also, think an are the strategies, can there more bring is significantly we go all or we that simply I of all LNG think supply think for or is, capacity? also from -- they do. think we in metrics a conservation I bring because is the think also can the consume. energy Africa, is talked Scandinavian of But require That Norway? the The more now because and easier are replace gas it which gas being LNG way, I from the

chemical the energy, at a project, Chem? Now, looks But good Now, is of time. for compared to indeed in Penn simply projects this very gap what mean Chris. cost does a yes, point European was it which significant already very competitive it that because of

the the of pick advanced very energy there, for far up companies ourselves by furnaces efficient electrical of is or I’m think chemical you you more but cetera. also that as All hydrogen et concern, the well, transition But out definitely competitiveness So, sure that in a of either midterm. technology, like lot good furnaces correct. for on industry the not tomorrow cetera, solutions particularly Germany absolutely about or I therefore, solutions are German et and hear, the

Operator

from is Martijn Rats from Stanley. Morgan Next Please go question ahead.

Martijn Rats

sort relatively of straightforward got I think. ones, I’ve two

actual of oil if of wanted First talked high markets I the as a already a volatile. demand marketing wondering being lot businesses, But in about and products ask, you of all, prices. result sort your I was disrupted destruction the sort to seeing these quite you’re of

trying in sort all be to anybody vast you’d level year. of I marketing the would your lies either if of And next business. you little say We’re Shell, offer that of would shares perhaps out a it’s a buy sort that figure I have wondering or sort things if in that for second imagine of Is technical And insight but your in tender the price the share induces have sort the that. where if wondering that, program there’s of world to given I But could consider? then the -- should to that good willing sort a a into was bit one, about execute of it. half into a something sort of tool toolbox was be few

Sinead Gorman

much, very Martijn. Thanks

very to be Ben, like it’s is first limited have anything like say one, think the I demand that? about on there talking add be would to apart you’d But sustainable very early On destruction. to from that I something

Ben van Beurden

No.

Demand it’s not I we’re it. And moment? destroyed. is, one. the is early the bit indeed, answer we seeing think That’s not in that No, easily a at are seeing the day. it

supply. is including Hence, we we by difficulties investment not are demand As in in of also see we year, just the matter do in in continued the a at a see What that if this decrease definitely see, in increase experiencing demand. product you look a fact, a world. the but performance, all price-wise, we the way, continued reduction around

Sinead Gorman

course. of risks, going And know, on in we are And can They as lot the quite one, have tend of some with to look options utilize, not you different come to us. second There large a we course. that range of come But be offers of to of Martijn, tender the offer. terms tools question around tender always divestments. completed. after that a I’m They’re comfortable frankly, to

have approach of We our buybacks. in today as we terms do the

And We have to we’ve that, market. our will progressive buy the AGM. we said, the I ability dividend. for But to off beyond gone ask as

range options we have a quite available. of So,

Operator

is question go next from ahead. Our Christyan Morgan. Malek Please JP from

Christyan Malek

thanks role Hi, and congrats my A them the on lot all for best. And and of have the team. questions. taking new been Sinead answered,

clearly see difficult particularly a it been question, you plan more this macro, sort have of which sort know the longer framework, one range, of line in or for the view to invest speaks own around but to view the Just in more a oil invest has to range. for capital the whether to to to it’s clearly important. could of clearly past, be gas your of sort firmer and, term of more And do pertains because sort that CapEx I prices the where of context period on bottom fuels, framework. And And your conducive. I your call -- on you the of the of wonder security oil? need sort whether investments view macro are of gas. the But in language in sort outlook changed the more of be for middle Have also in or long-term other and couldn’t highlighted -- energy around the on tools firmer and all to you’ve of sight a budget you the where most in that, from the have spirit security, there’s greater of of particularly oil needing obviously, a

because higher a relevant question the to backdrop future, in frame capital should sort can going And But I’m of medium only we’re macro the you it. of the I range see for that’s whether the so backdrop why the the Shell. Thank if term asking because the and that so balances understand about generate macro with calls you. wonder

Sinead Gorman

Yes.

its at I say look think it entirety. fair in Christyan, it’s So to that we

framework this when comes So, financial robust it a to is it. down

we terms of from terms do investments, our of range in Now, we perspective. in when it at the we macro, at where sit actually, look look a

the terms of looking at of be be could what the lower higher to and the it terms but at we’re end. will the in moment, position So, what in end as

So, what would that it get how say, in of very, bad stand terms -- and this And an helpful. this could me us investment gives regret investment. doing fundamentally, take very is ability really back that which it for to to

through, things stress I that side that to remain that. do of continue well. us test on disciplined go We’ll will as would continue the So say, as help we will to capital we and

it’s market, well. scenario on the price oil in do also we it as So, in but frankly, do that on well. planning it we carbon of as terms And

really I $XX framework to $XX to CapEx, think our of capital terms that would In said. don’t we’ve the within I’ll billion changed. I billion has allocation back say, is go It it.

it see make sure are We’re in of terms remaining up, will that decision the what And billion, focused disciplined disciplined around will opportunities be the what will at? be We see $XX make billion, will $XX a at through, those. returns it and we come on what come and that.

Operator

question take Cowen. Jason from now Please ahead. the Gabelman go will next We from

Jason Gabelman

maintenance. running I your to first excluding think, outside pretty go are European Schwedt wanted I you of levels, refining. elevated guess, said assets back to Ben, I

seeing impacting your of from kind some output in if natural then in tight secondary And you were just come already gas natural heard in so, that is Europe. question prices is in Something my And power. the that and changed running gas And as units investments your prices if market. I’m your are we’ve that have diesel that tightening refineries renewable on second of of rates lower at some higher has that wondering competitors was because the and of off?

past, and able you to and model think with that an talked your targets model. the asset-light being return about reduction I emissions asset-light hit in having

so, power You Energy number, maybe of press you put previously? this Thanks. you you in all kind had backlog release looking what’s and renewable the if been of than that? more driving I in. hard at And morning a wonder, that gigawatts given assets And of invest your can acquisition XX Sprng to invest power are in

Sinead Gorman

Jason. Thanks,

Ben; I you, the one to second think to you, first Wael. clearly

Ben van Beurden

a It’s the been for fresh Jason. We, and our -- of refineries some a we sure the continuously the of gas units that crudes buy that our that of some making doing indeed, back in to see -- intake. time, Thanks, natural no. for allow optimize we buy our do consumption or us sort everything of feedstocks bring course, is of some And we gas that actually or of to short version natural refining we that underloading see. quite price have the prevailing prices. conditions answer We high gas not already because kit minimize

have assets. we to footprint course, thing, is our very other done The refining concentrated that complex of really

natural that So, Rheinland, Europe highly you assets. more I both assets then guess, we anymore. PCK than game play are curtailed, different logistics rather actually that in much PCK is with And of gas and sensibly. game by to much more but And core not can have that be is PCK by strategic course, play complex prices. the Pernis story, a will

Wael Sawan

Jason, for question. Thanks, the Good.

that changed is the think the fundamental, the we strategy unchanged. strategy, I have

to an that’s across chain. creating value model asset-light continue a at entire we looking So the return focus on double-digit

not the generation I you returns. give on think double-digit reality will hard its own renewable that is

other the that compared a both to of Why double-digit you want, pipeline belief generation? that The many supply we significant which not do course, base don’t additionality, through fundamental renewable with of in of they some to and see bid. if our you the our able ultimately is competitors. something able to package is be that have what can will your energy offer is a you And reality can generation fundamental you our through those advantaged we being are, returns of forms in customers, get so, trading of customers

Borssele, sell So, in be If to need an I to we be to green are electrons able we in those over Netherlands, doing or We, kept That position, offtakes. we least moment, platform do the -- for close to green our an XX% there. what to what for where the to able customers. to the We have is to will by at example. green do. here equity but have in to can a had look take XX%, example XX% just or offtake that time, electron diluted of

core generation and be keep green of we get. assets, our as to dilute We premium many as of strategy. And continues recycle, capital on will that electrons of our developer to these we for can the much make sure the a renewable look that part enjoy hands

Sinead Gorman

get I one can Last In comes we’re one to team anyone have didn’t But to. the just sure the we’ll to it have to apologies I last interest time, IR you directly. going question? to And back Cecilia, we Cecilia? think make of cut after that.

Operator

Please question take will Henry final go Tarr now our ahead. We Berenberg. from from

Henry Tarr

at effects, But will then, debt linked again CFFO it of above sure working extremely I So, lastly, But, the pretty about shareholder is, we look One that and et over quarters it the value obviously derivative going think of you there in Thanks. Is that understand anything sort because returns come And as should level. capital sense? side? volatile is working few an on with just that from net environment. or I’m gearing cetera. we questions. QX. unwinding fair two sort capital we’ve similar? it’s quick XX% the either effects, material seen some next threshold moves crossed this up the something Is to

Sinead Gorman

at it Thanks say. somewhat $X.X you will interest the very given billion, I keep short, working about of Henry, as much. sitting time, capital

So, around billion. to what we really see was largely, $X just which there are two of inventory was it, one elements over

offset that down. volumes of did, we course, by reducing the really Now,

margin margin, initial would market active And remainder sort in having that really very we’re So around the you was in that of initial isn’t space. this outflow. surprising which be

that working very we manage on that very much comfortable So, it. terms top of closely, it in we’re I’m of capital,

shareholder XX%, question the that to about the manage the we in anything with than was No, you fact returns is? it where asked debt do entirety. greater Second is is it our

this at framework. from the it fundamentally, debt seeing our we’re cash now of of, is -- operations, which about really financial billion, is and We’re into course, looking really from But which $XX.X to down of plays the entire net also great. strong very And is proud strong generation that the we’re the that perspective macro yes, that.

into you. thank to some We over And have the their invite delivery ESG world. questions we’re the the we our quick strategy power cast on given energy and But annual during hope Meeting Henry. I I votes London. progress for hope joining past Annual safe you event a insights I call stay today. support Thank one week. shareholders made person without to well. and General XXth and XX progress, how on to the you XXth. apologies, our of bit your there, also in at periods I’d for families the at May soon transition end see for like a our security of we a So, update most May and you doubt, of of your a the energy in to you wish challenging and pleasant to in ensure hope supply the our striving one and the we’ve And months you

Operator

this for the session. And concludes Thank you participation. your

now leave may You the call.

Shell (SHEL) 5 May 222022 Q1 Earnings call transcript