Shares in Shell dipped after it missed earnings expectations for its latest three months.

The oil and gas giant had moved to forewarn investors of a decrease in the quarter to the end of June compared to the same time last year, but earnings were halved in the end.

The company still made adjusted earnings of £3.9 billion during the quarter, set against the £8.9bn a year earlier.

However, analysts had expected the figure to reach almost £4.3bn, according to a consensus compiled by the company.

The results also show a reduction from the energy major's record first-quarter results, when it made £7.6bn in adjusted earnings in three months, well ahead of expectations at the time.

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Since then Shell has courted controversy by saying it will no longer try to reduce its oil production by 1%-2% per year until the end of this decade.

The company said it has already achieved this target because it sold off some of its oil fields, allowing other companies to produce the oil instead.

It said it will continue to produce about as much oil as it currently does until 2030.

Wael Sawan, Shell chief executive, said the company "delivered strong operational performance and cash flows in the second quarter, despite a lower commodity price environment", adding: "Today we are delivering on our ... commitment of a 15% dividend increase."

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He continued: "We are going further on our buyback guidance by commencing a £2.3bn programme for the next three months and, subject to board approval, at least £1.9bn at the third-quarter 2023 results.

"As we deliver more value with less emissions, we will continue to prioritise share buybacks, given the value that our shares represent."

Stuart Lamont, investment manager at RBC Brewin Dolphin, said: “Lower oil and gas prices have hit Shell’s revenues and profitability.

"The company had previously set the scene with downgrades in its earnings estimates to reflect a more normalised trading environment, but it has still missed expectations with today’s results."

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Mr Lamont added: "The share buyback programme and increased dividend are good news for shareholders, but will inevitably come with questions attached in the current environment.”

Jamie Maddock, equity research analyst at Quilter Cheviot, said that “Shell disappointed by missing consensus profit expectations by around 10%, reporting sharply lower year-on-year performance due to weak oil and gas prices plus refined product margins”.

Mr Maddock also said: “While the energy crisis resulted in elevated plus volatile prices that had previously boosted Shell’s results across a couple of divisions, this was no longer the case for the second quarter.

“Analysts had previously called for an increase in dividends and Shell has delivered by raising its dividend by 15%, as previously indicated at its capital markets day.

"The company remains committed to using its bumper profits over the past 18 months to fund a repurchasing scheme. The high end of the company's capital expenditure guidance has also been trimmed.

“Chief executive Wael Sawan is still relatively new in post having taken the job in January.

"He had pledged to focus on closing the gap in performance compared to US competitors, but that remains to be seen as the firm faces headwinds as oil and gas prices tail-off but he is off to a good start by refocusing the business on improving capital allocation discipline.”

Ed Miliband, shadow climate secretary, pointed to the windfall tax. Mr Miliband said: "These figures demonstrate the continuing scandal of the Conservatives' failure to act on the windfalls of war being pocketed by the oil and gas companies.

"Labour would bring in a proper windfall tax to help tackle the cost of living crisis."

Shares in Shell closed down 32.5p, or 1.36%, at 2,364p.