Just over five weeks ago at our Capital Markets Day in New York, Wael and I outlined the Shell investment case and our longer-term vision for the company.
Our aim is to continue to deliver more value with less emissions, whilst rewarding our shareholders with consistency, delivering both competitive and resilient returns. And in Q1 we continued to make good progress.
And as we look forward, we remain confident due to both our portfolio strength, and an organization which continues to deliver, guided by our principles of performance, discipline, and simplification.
What we hope is now clear, is that we do what we say.
As we said at Capital Markets Day, we met our CMD23 financial targets for 2025 almost a year early, and as a result, we’ve set new financial targets, while we are staying firm on our carbon targets and ambition.
Repositioning the portfolio is a key step towards achieving our targets, and we have made meaningful progress in the first few months of 2025.
We’ve completed our divestments of the Energy and Chemicals Park in Singapore and in onshore Nigeria.
And, as we said we would, we are growing, but in a disciplined way. We completed the acquisition of Pavilion Energy, strengthening our Integrated Gas portfolio by further expanding our LNG trading and optimization capabilities.
In Upstream, we signed an agreement to increase our working interest in Ursa, in the Gulf of America. We already operate this asset, and we’re pleased to be able to further consolidate our leading deep-water position.
On projects, we took two key final investment decisions. The first is Gato do Mato in Brazil. This will be a Shell-operated asset in the Santos basin where we are the largest foreign producer.
The second is Phase 2 of the Northern Lights carbon capture and storage development in Norway. This will increase the project’s capacity from 1.5 million tonnes to more than 5 million tonnes of CO2 a year by 2028.
And on operations, in the first few months of 2025 we’ve achieved significant milestones.
I want to highlight just two of them. First, our Penguins FPSO in the UK North Sea is now on line and supplying much-needed natural gas to the region. This modern FPSO is expected to extend the life of the field by up to 20 years.
And second, Dover in the Gulf of America has started production. This is the second subsea tieback to our Appomattox hub, after Rydberg, which came on line last year.
Now let’s move to the financial results for the quarter.
We delivered solid results in a price environment that was relatively stable compared with last quarter.
Our Adjusted Earnings were 5.6 billion dollars, up 52% compared with Q4.
And we generated 11.9 billion dollars of cash flow from operations, excluding working capital. Consistent with outflows seen in the first quarter of recent years, working capital in Q1 was an outflow of 2.7 billion dollars.
Now, turning to our businesses, Integrated Gas production was higher than in Q4, as the turnaround at Pearl GTL was completed. However, liquefaction volumes were lower because of unplanned outages in Australia. Our LNG trading and optimisation results were in line with Q4, and that’s despite the higher non-cash paper losses recorded, which we highlighted would be seen across the first three quarters of the year.
Upstream had a strong Q1 with continued high controllable availability. Norway, Nigeria offshore, and Kazakhstan all delivered above 98%.
In Marketing, Mobility and Lubricants performed very well as both continued to further increase premium product margins. However, the Low-carbon option businesses continue to operate in a difficult macro environment, which we highlighted at CMD.
Chemicals also continued to see low margins this quarter. But with the divestment in Singapore, we expect that the Chemicals earnings contribution will improve.
In Products, the contribution from trading and supply improved relative to the previous quarter, and was at similar levels to Q2 and Q3 of last year.
So, overall, a solid set of results in the first quarter of 2025.
We are now into the second quarter, and there are significant macro uncertainties. But our approach remains the same, we’re following through on the long-term direction we
set at Capital Markets Day.
At times like this, the importance of a strong balance sheet and a robust financial framework are critical, and we have consciously positioned the company over the last few years leaving us well placed.
In Q1 our net debt position increased, reflecting lease additions from Pavilion, and a drawdown from the loan facilities provided at the completion of the Nigeria onshore divestment. These are all known items and our balance sheet continues to be one of the strongest in the industry.
Moving on to shareholder distributions, today we have announced a 3.5 billion dollar share buyback programme, which we expect to complete by the time of our Q2 results announcement. This makes it the 14th consecutive quarter in which we have announced 3 billion dollars or more in buybacks.
With this new 3.5 billion dollar share buyback programme we are well within our enhanced shareholder distribution range of 40 to 50 per cent of CFFO. A range that you can expect us to deliver on through the cycle given our low distribution break-evens – 40 dollars Brent for dividends, and buybacks continuing at 50 dollars.
To summarise…
In Q1 we delivered a solid set of results in a relatively stable price environment.
Our portfolio transformation is progressing, with several major achievements during the first few months of 2025.
Looking ahead, we are confident in the direction we have set and the strength of Shell to deliver for our shareholders through an uncertain macro. We will continue to focus on operational performance, be disciplined with cost and capex spend, and drive
competitive and resilient returns. And most importantly, deliver on what we say.
And finally, we hope that shareholders who are able to attend either virtually or in person will join us for our 2025 Annual General Meeting which will take place on May 20th.
Thank you.