Climate change: Heatwave frequency projected to increase even if climate targets are met

August 26, 2022

The tropics could be exposed to dangerously high heat levels most days, and the mid-latitudes are projected to experience deadly heatwaves every year by 2100, according to an article published online in Communications Earth & Environment. The findings suggest that CO2 emissions from human activity could drive global increases in exposure to extreme temperatures in the coming decades, even if global warming is limited to 2˚C, in accordance with the Paris Agreement.

A series of deadly heatwaves have impacted major cities in the past decade. The effects of climate change on heatwaves threaten the habitability of large areas of Earth’s land surface if greenhouse gas emissions are not curtailed. Very high temperatures pose a threat to public health, with extreme heat contributing to heat cramps, heat exhaustion, and chronic illnesses.

To predict global mean changes in temperature, CO2 concentrations, and relative humidity, Lucas Vargas Zeppetello and colleagues analysed predictions from global climate models, human population projections, and the relationship between economic growth and carbon emissions. They estimated that there is only a 0.1% chance of limiting global average warming to 1.5°C by 2100, in line with the updated Paris Climate Agreement goal. Instead, they predicted that the change in global mean temperatures will likely approach 2˚C by 2050. They projected that by 2100, many people living in tropical regions — such as India and sub-Saharan Africa — will be exposed to dangerously high heat levels during most days of each typical year. Additionally, deadly heatwaves, which are currently rare in the mid-latitudes, could happen every year in this region — located between the two tropics and the polar circles. For example, the authors predicted a 16-fold increase in the occurrence of dangerous heatwaves in Chicago, USA.

The authors suggest that without adaptation measures there may be large increases in the incidence of heat-related illnesses — particularly in the elderly, outdoor workers, and those with lower incomes — and that more ambitious targets to reduce emissions are needed.

doi:10.1038/s43247-022-00524-4

ASSASSINITO

2 journalists shot dead in Colombia after covering story

Armed men traveling on motorcycle open fire on vehicle in which reporters were traveling

Laura Gamba Fadul |29.08.2022


BOGOTA, Colombia

Two journalists were shot dead in northern Colombia shortly after covering religious festivities in the village of Santa Rosalia de Lima in the department of Magdalena, police said Sunday.

Leiner Montero, the director of an online radio station, and Dilia Contreras, the director of an online news website, were attacked by armed men on a motorcycle as they were traveling in a car on a highway, police said. A third person who was also in the vehicle was injured and is receiving medical attention.

Magdalena police commander Andres Serna said that shortly after Montero was involved in a fight between several people at the event, he decided to leave along with Contreras and another man.

"We are committed to the citizens of Magdalena to give results in the shortest possible time for this sad case where two journalists who were very appreciated among their guild, relatives and acquaintances died," Serna added.

Authorities are investigating whether the events are related to their work as reporters and who may be behind the killings, but there are several criminal groups present in the area, including the Clan del Golfo and other drug trafficking gangs. Authorities have revealed that the reporters were investigating powerful families in the region who are involved in corruption schemes.

"It is urgent that the police and the prosecutor's office investigate and take into account the reporting work they were doing," said Jonathan Bock, director of the Foundation for Press Freedom (FLIP), a non-governmental organization that promotes press freedom in Colombia.

Montero and Contreras are the first journalists killed in Colombia so far this year, according to FLIP.

Sweden’s mining hurdles impede the EU’s domestic battery push

Bloomberg News | August 28, 2022 |

Graphite from the Vittangi project. (Image by Talga Group).

Talga Group Ltd. has waited for more than a decade to go ahead with a graphite mine in Sweden that could supply enough battery material to power two million electric cars a year and reduce the continent’s dependence on China.


Yet after some signs of progress, the Australian company is back in administrative limbo on its Nunasvaara South site after a court date for an environmental permit was postponed until February. The slow process has left the project at the prospecting stage since 2011.

“The basic problem we’re getting is that there is this unlimited processing time,” said Martin Phillips, chief operating officer at Talga, which says graphite from its mine and refinery running on renewable energy will make the world’s greenest electric vehicle battery anode. “That creates the challenge for us to keep financing our company while we wait for the Swedish authorities to make a decision.”

Two years ago, the European Union highlighted Sweden’s vast mineral resources, which include about half of the 30 raw materials the bloc considers critical to meeting its goals for green technology such as EV batteries. Sourcing them from within the EU would ease reliance on China at a time when supply chain snags and geopolitical tensions are fueling a push toward greater self-sufficiency.

Yet prospects for getting projects underway look more uncertain than ever because of a lengthy permitting framework and fervent local opposition, miners say.

While Sweden has a centuries-long history of extracting metals from the earth and ranks as Europe’s biggest iron ore producer, new projects have been beset by concerns over the environment and encroachment on the indigenous Sami population in the north — whose reindeer grazing rights are crucial to its livelihood.

“Mines always entail a large impact on both the environment and other activities, such as reindeer herding and tourism,” says Jonas Rudberg, a spokesman for the Swedish Society for Nature Conservation, an environmental group.
Rare Earths

In Southern Sweden, a struggle over mining rare earth minerals in Norra Kärr — deemed the most promising deposit of its kind in Europe — has spanned more than a decade. Locals fear a mine would not only destroy the surrounding farms and forests but also contaminate nearby lake Vättern, the source of drinking water for 300,000 people.

Such accidents aren’t without precedent. In 2012, leaks from a tailings pond at the Talvivaara nickel mine in neighbouring Finland spilled toxic levels of metals and uranium into nearby lakes and rivers in one of the country’s worst environmental disasters.

Industry executives say local concerns risk standing in the way of broader technological shifts that would help the environment and fight climate change.

“It’s a double standard,” said Roberto Garcia Martinez, chief executive officer of Eurobattery Minerals AB, an exploration company looking to develop sustainable and ethical mineral mines in the EU. “Everyone wants to drive electric cars, but we don’t want to have a mine in our back yard — and that needs to change.”

The region’s plodding progress toward a mining base capable of powering the EV transition stands in contrast to the speed with which battery-cell maker Northvolt AB set up an independent supply chain. The Swedish company, which gets graphite from China, has encouraged the development of domestic mines while funding research into alternative battery technologies.

As EV sales take off, the European Commission estimates that demand for lithium, a crucial ingredient in batteries, will increase by as much as 18 times by the end of the decade. Cobalt use is set to climb by some five times.

Rudberg said he hopes some demand for these raw materials can be met through mines “where it won’t conflict too much with other interests.” He also stressed the importance of other avenues for making the green transition — such as battery recycling and lowering consumption.

“It is a bit unrealistic to imagine a future where all of the earth’s population drives a Tesla,” Rudberg said. “The earth’s resources won’t be enough.”

Sweden’s Economy Ministry is carrying out an inquiry into how to streamline the permitting process to ensure a sustainable supply of “innovation-critical” metals and minerals. The review sought input from industry, legal and environmental experts, including Rudberg, and the results are expected in October.

“The process scares a lot of people away who want to invest in Swedish mines, since it is so uncertain if you will get a permit or not, even if you are doing everything right,” said Maria Suner, CEO of the Swedish Association for Mines, Mineral and Metal Producers.

Erika Ingvald of The Geological Survey of Sweden, who acted as an expert on the inquiry, hopes it will lead to a simpler process. As for the mines awaiting a decision, she said she’s unsure when they can expect progress.

“It is like playing the lottery,” she said. “It’s almost impossible to say.”

(Reporting by Isabella Anderson).

COUNTERINTUITIVE

Fracking may decrease magnitude of microearthquakes at mining operations – study

Staff Writer | August 26, 2022

Rock Springs No. 5 coal bed along Superior Cutoff Road, east of Superior, Wyoming. 

(Reference image by James St. John, Wikimedia Commons).

New research published in The European Physical Journal B proposes the idea that fracking can decrease the magnitude and the microearthquakes that tend to occur in certain mining operations.


Hydraulic fracturing involves pumping large quantities of fluids into a wellbore at high pressures. This has the effect of enlarging fractures in the target rock formation which, in turn, results in an increase in the yield of oil or gas from rocks — especially from low-permeability rocks like tight sandstone, shale and occasionally coal beds.

The paper’s authors attempted to quantify the benefits of preconditioning with hydraulic fracturing by integrating previous investigative models to create a more realistic approximation of the seismic ruptures.

This model was applied to a mine in Chile’s O’Higgins Region to assess induced seismic activity due to the effect of hydraulic fracturing. The team also considered both the magnitude of microearthquakes and the time between events.

This was done by analyzing 15,436 microearthquakes recorded between 2003 and 2008 in three sections of the mine. Comparisons were then made on the basis of whether the section had been preconditioned with hydraulic fracturing or not.

The results seemed to imply that hydraulic fracturing decreases both the magnitude and the number of microearthquakes.

In the team’s view, the model that was used could also be employed to predict seismic activity and to understand so-called marsquakes occurring on Mars.

“In reference to the next step in this investigation, our interest is to work with the problem that arises when self-similarity is broken,” Pedro Vega-Jorquera, co-author of the paper, said in a media statement.

“Thus, considering the problem of multi-sources and relating them to multimodal distributions, this would imply evaluating possible modifications of the seismic hazard via hydraulic fracturing.”

Japan’s nuclear policy shift marks a turning point for uranium

Henry Lazenby | August 26, 2022 | 

Workers at TEPCO’s Fukushima Daiichi Nuclear Power Station work among underground water storage pools on April 17, 2013.

 Credit: Greg Webb / IAEA (Wikimedia CC 2.0)

More than a decade after the 2011 nuclear accident at the Fukushima Daiichi nuclear power plant in Japan roiled the uranium industry, the country has announced a major policy shift towards restarting idled reactors.


On Aug. 24, Prime Minister Fumio Kishida announced that Japan would restart more suspended nuclear power plants and look at developing next-generation reactors. This represents a significant policy shift amid soaring energy costs, a global fuel shortage, and extreme weather.

According to Kishida, Japan aims to restart seven more reactors from next summer. This would increase the total number of reactors online to 17 out of 33 operable reactors in the country (pre-Fukushima).

Kishida also said that officials would look at extending the lifespan of existing reactors beyond the current maximum of 60 years. Officials have been instructed to come up with concrete measures by year-end.

Nicolas Piquard, VP, portfolio manager and options strategist at Horizons ETFs Management, tells The Northern Miner the reason Japan’s announcement is such a big event is that it highlights how difficult the situation has become for energy grids globally, especially the ones that rely on imported energy sources like liquid natural gas.

“In the year to date, Japan’s capital Tokyo has buckled under two power crunches, with one occurring during a significant heat wave. By restarting its reactors, Japan also hopes to curb its reliance on energy imports,” he said.

Japan’s announcement was more significant than the series of other announcements recently by major economies, including France, the U.S., China and India.

Rio Tinto invests $27 million in new aluminium recycling centre in Québec

Staff Writer | August 26, 2022 | 

Aluminium scrap. Image from Rio Tinto.

Rio Tinto (NYSE: RIO, ASX: RIO) announced Friday it is investing C$35million ($26.8m) to build a new aluminium recycling facility at its Arvida Plant in Saguenay-Lac-Saint-Jean, Quebec.


The investment will expand its offering of low-carbon aluminium solutions for customers in the automotive, packaging and construction markets and the facility will make Rio Tinto the first primary aluminium producer in North America to incorporate recycled post-consumer aluminium into aluminium alloys, the company said.

Clean aluminium scrap sourced locally from used vehicles and construction materials will be remelted to produce recycled content that will be used in aluminium billets at the Arvida smelter as well as other products from Rio Tinto’s Quebec facilities.

“Investing in new recycling facilities in Arvida is another step in our strategy to expand our offering of low carbon aluminium products and integrate the circular economy into our value chain,” Rio Tinto Aluminium managing director of Atlantic Operations Sebastien Ross said in a media statement.

“This will allow us to continue to meet our customers’ growing demand for responsible, traceable and responsible products.”

The recycling center is expected to be operational in the second quarter of 2024 and will have an initial capacity of 30,000 tonnes per year.

Construction will begin in coming months, Rio said, with a remelting furnace equipped with regenerative burners and an automated scrap loading system to be installed in an existing building at the Arvida plant.

The project is expected to generate C$30 million ($23m) in economic benefits in Quebec and will create around 10 new permanent jobs at the Arvida Plant.

Panasonic in talks for $4 billion battery plant in US
Bloomberg News | August 26, 2022 

Panasonic’s cylindrical lithium-ion batteries. (Image courtesy of Panasonic.)

Panasonic Holdings Corp., which supplies electric car batteries to Tesla Inc., is in talks to build another battery plant in the US worth around $4 billion, the Wall Street Journal reported Friday, citing people familiar with the matter that it didn’t identify.


Oklahoma is a likely location for the new plant, although there are no guarantees an agreement will be reached, according to the report. Any new facility would be on top of another $4 billion EV battery factory that Panasonic said in July it plans to build in Kansas.

A spokeswoman for Oklahoma Governor Kevin Stitt declined to comment to the WSJ.

A representative for Panasonic said the company is “examining various growth strategies for our automotive battery business, but there is no further information that we can share at the moment aside from what we have already announced.”

The Japanese manufacturer is seeking to ramp up production capacity to meet growing demand from Tesla and other electric vehicle makers as consumers start to embrace cleaner cars in a meaningful way. EV cell production is a business the 104-year-old electronics giant sees as critical for its future growth.

Though Panasonic has supplied Tesla from its early days, it’s been slower to build scale versus rivals LG Energy Solution Co. of South Korea and China’s Contemporary Amperex Technology Co. Ltd., which is the world’s largest maker of EV batteries.

Korean battery makers also have a slew of plans for battery plants in the US, constructing four for General Motors Co., two for Stellantis NV and three for Ford Motor Co.

(By Yuki Furukawa)

Bumper mining profits down under defy doom but challenges remain
Bloomberg News | August 26, 2022 |

Miners on mine site in Perth, Australia. (Stock Image)

The soaring profits unveiled by Australian miners this week were a beacon of light amid the gloom dominating economic headlines. Yet the coming months look more challenging, particularly for companies without exposure to clean energy.


Miners that dig up materials vital to decarbonization led the way in the first half, with Pilbara Minerals Ltd. and Allkem Ltd. reporting record earnings as prices for lithium soared.

Traditional miners didn’t miss out on the bonanza though, with diversified base metals producer South32 Ltd. and pure-play fossil-fuel miner Whitehaven Coal Ltd. reporting strong results. That followed behemoth BHP Group’s unprecedented earnings haul.

The eye-popping profits Down Under were reaped on the back of surging commodity prices. But with problems such as battered supply chains, a slowing global economy, and waning demand in top customer China now looking hard to budge, the good times for many Australian miners may be over.

“A lot of companies have reported record earnings, record cashflow and record returns to shareholders, and in most of the instances it’s been 100% price-driven,” said Glyn Lawcock, head of resources research at Barrenjoey. “Massive” cost headwinds remain, and the coming 12 months would likely see base-metal producers in a particular struggle, he said.

The divide between Australian base metals miners and those involved in extracting new-energy resources — and even coal — looks set to become starker in the coming months.

Soaring global demand for electric vehicles promises to keep lithium prices high for at least the next six months, Credit Suisse analyst Saul Kavonic said in an interview this week. Though beyond that he said the outlook was less certain with more producers coming online. Australia is the world’s biggest producer of the key material in lithium-ion batteries.
Liking lithium

Perth-based Pilbara Minerals grew its revenue by 577% over the year, and the company is optimistic that lithium demand will remain high, driven by a rapid uptake of EVs.

Allkem, a major lithium producer with operations in Australia and Argentina and plans to expand to Canada and Japan, posted a full-year net income of $337 million, compared with a loss the year before.

While China dominates the processing of lithium ore into battery-grade products, the two Australian companies are working to change that. Pilbara is building a plant in South Korea with Korean steelmaker POSCO, while Allkem is constructing a facility in Japan in a joint venture with Toyota Motor Corp.

Iluka Resources Ltd., which specializes in mineral sands used in an eclectic range of products including paints, ceramics, sunscreen, and hip replacements, this week posted its highest ever full-year profit, soothing market fears that global headwinds were reducing demand. It was helped by a supply crunch caused by Russia’s invasion of Ukraine and ongoing issues at Rio Tinto Plc’s South African mineral sands mine, it said.

Meanwhile, South32 Ltd reported record underlying earnings that soared fivefold to $2.6 billion.

While South32 still derives a large chunk of its revenue from fossil fuels, Chief Executive Officer Graham Kerr on Thursday confirmed the company would not pursue new coal projects, two days after it backed away from a planned $700 million expansion of an existing coking coal project in Australia. The company said coking coal may have only two more decades in the steel-making process before green alternatives such as hydrogen replace it.

Still, Whitehaven Coal offered a dramatically different outlook. After posting its highest ever profit of A$1.95 billion ($1.36 billion) on the back of record prices for the fossil fuel, Chief Executive Officer Paul Flynn predicted demand for both thermal and metallurgical coal would remain strong “well after 2050.”

“Net-zero emissions doesn’t mean no coal production,” Flynn said.

(By James Fernyhough)

Compost helps extract REEs from e-waste

Staff Writer | August 25, 2022 | 

Compost. (Reference image by MPCA Photos, Flickr).

Penn State University researchers are using micro- and nanoparticles created from compost to capture rare earth elements from aqueous solutions containing e-waste.


“Waste products like corncobs, wood pulp, cotton and tomato peels often end up in landfills or in compost,” Amir Sheikhi, assistant professor of chemical engineering, said in a media statement. “We wanted to transform these waste products into micro or nanoscale particles capable of extracting rare earth elements from electronic waste.”

According to Sheikhi, the challenge with the technique he and his colleagues are proposing lies in efficiently separating the metals from refuse.

“Using the organic materials as a platform, we created highly functional micro- and nanoparticles that can attach to metals like neodymium and separate them from the fluid that surrounds them,” Sheikhi said. “Via electrostatic interactions, the negatively-charged micro- and nano-scale materials bind to positively-charged neodymium ions, separating them.”

To prepare the experiment, the researcher and his team ground up tomato peel and corncob and cut wood pulp and cotton paper into small, thin pieces and soaked them in water. Then, they chemically reacted these materials in a controlled fashion to disintegrate them into three distinct fractions of functional materials: microproducts, nanoparticles and solubilized biopolymers. Adding the microproducts or nanoparticles to neodymium solutions triggered the separation process, resulting in the capture of neodymium samples.

The scientists published their findings in the Chemical Engineering Journal, where they explain that this time around, they improved upon the separation process demonstrated in previous work and extracted larger sample sizes of neodymium from less concentrated solutions.

The goal now is to extend this separation mechanism into real-world scenarios and partner with interested industries to further test the process.

“We also hope to tune the selectivity of the materials toward other rare earth elements and precious metals, like gold and silver, to be able to separate those from waste products as well,” Sheikhi said.

AND THEY NEED TAXPAYERS TO SUBSIDIZE CARBON-CAPTURE, WHY!

Big Oil's $41 Billion Buyback Bonanza

By Alex Kimani - Aug 28, 2022, 

• Supermajors are on track to buy back a near record amount of shares this year. 
• Big Oil’s share buybacks have doubled from 2014.
• 
  
• While some supermajors prefer passing out dividends, others prefer buybacks as away to consolidate voting shares and the tax benefits that come along with the strategy

Oil and gas supermajors are on course to repurchase their shares at near-record levels this year thanks to soaring oil and gas prices helping them to deliver bumper profits and boost returns for investors.  According to data from Bernstein Research, the seven supermajors–including ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), BP (NYSE: BP) and Shell (NYSE: SHEL)--are poised to return $38bn to shareholders through buyback programmes this year, with investment bank RBC Capital Markets putting the total figure even higher, at $41bn. 

In 2014, when oil was trading over $100/barrel, we only saw $21 billion in buybacks. This year’s figure rivals that of 2008. 

But here’s another interesting thing: Big Oil’s capex and production have remained mostly flat despite reporting record second-quarter profits. 

Data from the U.S. Energy Information Administration (EIA) shows that Big Oil companies downshifted both capital spending and production for the second-quarter. An EIA review of 53 public U.S. gas and oil companies, responsible for about 34% of domestic production, showed a 5% decline in capital expenditures in the second-quarter vs. Q1 this year. 

Meanwhile crude oil production has increased 10% Q/Q, but remained flat compared to Q4 2021 despite an 86% jump in cash flows to $25.7 billion.

Some oil and gas majors are prefering to return excess cash to shareholders in the form of fat dividends. For instance, ConocoPhillips(NYSE: COP) announced during its second quarter earnings call that it will pay shareholders $1.40 per share in a special dividend on October 14.  For perspective, that’s nearly three times its regular quarterly dividend of $0.46.

However, in many cases, Big Oil companies prefer buybacks to dividends for several reasons. 

First off, buybacks effectively reduce a company’s outstanding shares while propping demand for the stock. Consequently, the smaller number of shares automatically increases earnings per share (EPS) since the company’s earnings are distributed among fewer shares. 

Additionally, there is a tax-efficiency element here. As a method of returning capital to shareholders, buybacks are preferred because there are no additional taxes on the sale process, as opposed to dividends that get taxed up to 20%. For buybacks, the tax applies only to the actual sale of shares.

Another big consideration for the oil majors: buybacks deliver more voting leverage back into the hands of companies, something that Exxon shareholders understand only too well when activist investor Engine 1 was able to push for the company to diversify the oil company away from fossil fuel by having three of its members sitting on the board.

Here’s a rundown of how Big Oil companies have been repurchasing shares.

• Exxon Mobil

Exxon Mobil Corp. has been using the strength of its balance sheet to return significant capital to its shareholders via dividends and share buybacks and has announced plans to continue such distributions going forward.

Exxon returned $7.6 billion to shareholders during the second quarter through dividends and share buybacks, with $3.9 billion for share repurchases and $3.7 billion going into dividends. Year-to-date, Exxon has repurchases amounting to $6 billion and eyes repurchasing up to $30 billion shares through 2023.

"We're definitely focused on being efficient as we look to return capital to shareholders," ExxonMobil CFO Kathryn Mickells told investors.

Exxon Mobil reported cash flow from operations of $20 billion for the April-June period while capex reached $4.6 billion in Q2 2022. Exxon’s capex is running at $9.5 billion year-to-date, and the company expects capex to fall between $21 billion-$24 billion, reflecting increased investment in “chemical and short-cycle projects with strong returns.”

Exxon produced 3.7 million oil equivalent barrels per day in the second quarter, a 4% increase from the first quarter. However, Exxon Mobil cautioned that expanding output any further is unlikely, with CEO Daren Woods saying the refining market is extremely tight and that "growing supply will not happen overnight."

• Chevron

Chevron has spent nearly $4 billion repurchasing its own shares in the first half of the year. The company, however, is targeting a lot more and has raised the upper limit of its buyback target for the full year to $15 billion, up from $10 billion previously. Wall Street was not expecting such a big expansion of the buyback program after Chevron raised its guidance in May to the top end of its $5 billion-$10 billion range.

"We think we can do it all. Grow the dividend to investors, grow traditional and new energy, pay down debt, and buy back shares. When we have cash in excess of those first three priorities, we buy back shares. We'll continue buybacks even when the commodity cycle turns down,’’ Chevron's Chief Financial Officer Pierre Breber told Reuters.

Chevron posted its biggest quarterly earnings ever, built on strong fuel margins and high prices for natural gas and oil. The oil major posted second-quarter net profit of $11.6 billion, or $5.95 per diluted share, more than triple the $3.1 billion, or $1.60 per share for last year’s corresponding period. Chevron's average U.S. sales price for a barrel of crude oil and natural gas liquids (NGLs) was $89 in the quarter vs. $54 a year earlier. The California-based energy giant produced 1.72 million oil-equivalent barrels per day in the second quarter, marking a decrease of 266,000 barrels per day vs. Q2 2021.

• Occidental Petroleum

Occidental Petroleum CEO Vicki Hollub told investors during the company’s second quarter earnings call that the company plans to "buy back a significant volume of shares, or at least we hope to, over the next few years. We don't feel the need to grow production until we get beyond that point, because we feel like one of the best values right now is investment in our own stock."

Related: Half Of UK Households Will Be In Fuel Poverty By January

Occidental has paid down much of the debt it took on in 2019 to buy rival Anadarko Petroleum. In the second quarter, it paid down $4.8 billion in debt and launched a $3 billion share repurchase program. OXY said it spent $1.1 billion to buy back shares through Aug. 1.The Houston-based energy company posted an adjusted profit of $3.2 billion, or $3.16 per share.

Occidental Petroleum’s strategy if pumping oil while it develops technology to reduce carbon emissions from fossil fuels gained a serious vote of confidence after the Federal Energy Regulatory Commission approved a request from Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) to accumulate as much as a 50% stake in the oil producer.

• Shell Plc.

A month ago, Europe’s biggest oil company Shell Plc. extended its share buybacks after its second-quarter profits beat an already record-breaking previous quarter on the back of soaring crude, gas and oil product prices. Shell announced the commencement of a $6 billion share buyback programme to be executed in  Q3 2022,  after completing buybacks of $8.5 billion in the first half of 2022.

High crude prices normally weigh on refining margins, yet Shell's refining margin virtually tripled to $28 a barrel thanks to tight refined fuel supply. Shell is on track to exceed the company's guidance for shareholder returns of up to 30% of cash from operations. However, Shell did not raise its dividend from its current level of 25 cents a share, good for a modest 4% annual increase after a 60% cut during the pandemic.

• TotalEnergies

TotalEnergies SE announced that it will extend its $2 billion buyback program into the third quarter after profit surged to a record, propelled by soaring demand for natural gas in Europe and surging gasoline prices. That comes on the back of H1 2022 repurchases amounting to $3 billion. However, TotalEnergies’ buybacks have been viewed as being overly conservative by comparison, which has limited its share price gains.

The company reported Q2 net profit jumped 2.6x to $5.69B from $2.21 in the year-ago quarter, while revenues rose 59% to $74.77B. Total’s Q2 hydrocarbon production totaled 2.74M boe/day, with the company saying it expects it to remain flat for the full year.

By Alex Kimani for Oilprice.com