Royal Dutch Shell reported a near 50 percent rise in quarterly profits, driven by strong refining, while solid cash generation underscored the oil and gas company has adapted well to a world of low oil price.
Royal Dutch Shell is hedging its bets over the next two decades with expectations that motor fuel consumption will be diminishing and other markets rising.
Since the oil price plummet it 2014, Shell has transitioned its business model over to refining oil, offering other refined oil products, and producing petrochemicals. The oil giant will produce well beyond gasoline to serve other growing economic sectors, and to offset the role EVs will play by the 2030s.
Rapid growth in the global economy, especially Asia, will grow demand for other refined oil products and petrochemicals.
Asia will see new roads added, with demand creating economically viable substitutes for asphalt. Shell wants to be poised and ready to provide that supply.
The oil giant will also be ready to provide the polymers and chemicals that go into plastics used in vehicles and many other products, said Shell’s head of manufacturing Lori Ryerkerk, who is in charge of refining.
Shell will double the size of its chemical operations by the mid-2020s with several new plants coming to Louisiana and Pennsylvania that benefit from access to cheap shale gas.
Refining oil will be part of the company’s portfolio to an even larger extent than it was years ago.
“Refining will continue…