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It has been just over three years since Wael Savan succeeded Ben van Beurden as CEO of Shell.
While there has been a lot of buzz, not just about the BP takeover bid, a less noted aspect of Savan’s time at the helm so far is how well the oil major has beaten expectations on results day.
In five of the past eight quarters, Shell has reported better-than-expected earnings, most notably at the end of October last year when it the income in the third quarter was 5.4 billion dollars — Even ahead of the $5.1 billion forecast by the most highly regarded analysts.
This may indicate nothing more than skilled expectation management.
However, for a business as widely known in the market as Shell, beating expectations – especially at this scale – takes some doing.
Given the sharp annual decline in oil prices, this suggests that Savan has boosted Shell’s operating performance to a degree that the market has underestimated.
A Shell petrol station in London, UK, Wednesday, January 7, 2026.
Chris Ratcliffe | Bloomberg | Getty Images
It’s all worth keeping in mind tomorrow when Shell reports results for the fourth quarter of 2025 and for the year as a whole.
together Brent crude is down about 19% from 2025and at some point last month, For the first time in five years, it fell below 60 dollars per barrelCore income for 2025 could fall by about a fifth compared to the previous 12 months.
In the fourth quarter, they are expected to decline by about 10% year-on-year; Shell said in a trading update last month that its bottom-line division would report lower earnings, its chemicals division would report a “significant loss” and its energy trading business’s results would be “expected to be significantly lower” than in the third quarter.
So Shell’s upstream business continues to cheer, with the company last month saying production for the quarter would be 1.84-1.94 million barrels of oil equivalent per day, compared with 1.832 million in the previous quarter. Liquefied natural gas volumes should also be slightly higher than in the third quarter.
Concerns about return on capital
These modest improvements have not allayed concerns about the sustainability of Shell’s capital return program.
In each of its last two quarterly trading updates, it announced plans to buy back $3.5 billion of its own stock, the latest of which marked the 16th consecutive quarter that Shell has announced buybacks of $3 billion or more.
It’s a performance that marks Shell as a top performer when it comes to capital discipline. Among its peers, only Exxon Mobil maintained its buying levels despite lower crude oil prices, with the likes of BP and Chevron reducing their buying pace last year in response to market conditions. So this will be closely watched tomorrow.
Shell’s ability to sustain this pace of acquisitions will, in turn, depend on its degree of cost control.
On Capital Markets Day in late March last year, Shell raised its cost-cutting target from $2-3 billion by the end of 2025 to a total of $5-7 billion by the end of 2028. It also cut its capital spending target to $2-202 billion in June 2023, from an earlier target of 22-25 billion pounds a year.
It would be surprising for the company to fall short of these targets so soon after setting them, which is another reason to feel relatively optimistic about the acquisition’s prospects.
It will be interesting to hear what Savan says about where Shell is deploying capital. Reuters reported last month that the company might Sells Vaca Muerta shale oil and gas assets in Argentina’s Neuquen Basinproduction costs here are higher than comparable assets in the US, which can attract several billion dollars. Such a move would be in line with Savan’s gradual restructuring of Shell’s portfolio, which has also seen it divest assets such as an LNG project in Argentina and some well-documented renewable energy projects.
One of Shell’s most enthusiastic parts of the world is Nigeria. Sawan was in the country two weeks ago and met President Bola Tinubu at his official residence in Abuja.
In it, he highlighted Shell’s recent investments in the country, including $5 billion in the Bonga North deepwater project, 120 kilometers off the coast of Nigeria, and $2 billion in the HI gas field. He said Shell and its partners are advancing plans for the nearby Bonga Southwest project, which could cost up to $20 billion and be one of the world’s largest energy projects.
This newfound enthusiasm reflects a significant shift in Shell’s approach to Nigeria over the past decade.
BP story
One topic Savan wants to avoid is BP. Shell has officially denied the move against his smaller rival in June last year, he was barred from making a bid for the next six months under the takeover rules. That period ended on Boxing Day, but Shell is unlikely to have had a change of heart — not least because BP’s share price rose 25% after Shell rejected the offer. The Financial Times reported seven weeks ago that Greg Guth, Shell’s former head of mergers and acquisitions and a key backer of the BP takeover left the company before the no-trade announcement.
It may be harder to ignore Shell’s consideration of moving its main stock listing to New York. Despite outperforming Chevron over the past two years, Shell has not been able to close the stock market valuation gap with its US rival, which is sure to anger arch-rival Savan.
It wouldn’t be a surprise if it eventually came to fruition — In the process, London dealt a huge blow to the City’s reputation.
Top TV picks on CNBC
Astrid Nordin, Lau chair of China international relations at King’s College London, said recent visits by Western leaders to China were a boost for the country because they showed Beijing’s importance in the global economy, despite threats of retaliation by US President Donald Trump.
Deborah Elms, head of trade policy at the Hinrich Foundation, says that in 2026, companies and governments will cooperate through bilateral “miniature agreements”.
Need to know
Britain and China are eager to make business dealsThe diplomatic warm-up followed Prime Minister Keir Starmer’s visit to China. Although no broad-based free trade agreement has been reached, companies in several industries have announced major investments and partnerships aimed at deepening commercial ties.
Trump has warned that Britain’s trade with China is “very dangerous”. His comments on Thursday Starmer made a four-day visit to China last week, the first by a British prime minister in eight years. After years of strained relations, China and Britain are on the move development of long-term strategic partnership.
Is “America First” backfiring when Washington’s allies go it alone? Nations and power blocs forging connectionsostracize the more hostile US.prior agreement“With Canada and Rapprochement with Great Britainas well as EU treaties India and South American countries.
– Holly Ellyatt
Quote of the week
The US looks like an increasingly unstable and unreliable partner. I think it has always been important for the UK to have a good relationship with China, but that seems even more so now given the volatility.
— Professor Astrid Nordin, Chair of China International Relations, King’s College London
In the markets
The FTSE 100 rose last week to 10,314.59 on Tuesday, from 10,154.43 last Wednesday. However, the UK’s blue-chip share index ended Tuesday’s session down 0.26%.
The poundMeanwhile, it fell against the dollar, with sterling trading at $1.3697 against the US dollar on Tuesday, down from $1.3805 a week ago.
The yield on the benchmark 10-year UK government bond is also known golds — decreased slightly to 4.512% from 4.539% last week.
Performance of the Financial Times Stock Exchange 100 index over the past year.
– Hugh Leask
It’s coming
February 5: Bank of England rate decision
February 6: Halifax House Price Index for January
February 10: BRC retail sales data for January