European Integrated Energy: 1Q26 Benchmarks

研报英文原文证据摘录

European Integrated Energy: 1Q26 Benchmarks

Barclays | European Integrated Energy

As noted in our preview, Earnings set to rebound, 31 March, consolidated earnings of

the European Integrated group rebounded in the first quarter, up 36% y/y. Corporate RoCE for

the quarter rose c4pp to 13.1%, a percentage point higher than our own estimates - largely

reflecting strong trading results, particularly among the Majors. RoCE in downstream reached

22.3%, up 10.8 percentage points, while upstream RoCE averaged above 14%, up by 3

percentage points.

Significant working capital build led to higher net debt : The European group reported free

cash flow (FCF) of approximately $5 billion, marking a 42% decline y/y. However, FCF excluding

working capital adjustments rose by about 50% y/y to nearly $29 billion, indicating a

substantial build-up in working capital during the quarter, due to elevated crude and product

prices. Shell, for instance, recorded a working capital build exceeding $11 billion. Consequently,

a combined European group net debt increased to c.$200 billion at the close of the first quarter,

up roughly $18 billion from the previous quarter. We expect this trend to reverse in the latter

part of the year.

Middle Eastern conflict disrupted production..: Ongoing geopolitical conflict reduced

upstream production of a few companies, notably TotalEnergies reported an average reduction

of roughly 100kboe/d in Middle Eastern output during the first quarter of 2026. BP and OMV

recorded a drop in hydrocarbon production from the region while Shell indicated that, along

with production, its LNG deliveries were constrained due to the shutdown of Qatar’s operations.

As these blockages persist, the effect of decreased production is expected to continue into the