Shell profits double to nearly $40 billion

Hong Kong/London

Shell made a record profit of almost $40 billion in 2022, more than double what rake the year before after oil and gas prices skyrocketed after the Russian invasion of Ukraine.

Europe’s largest oil company by revenue reported full-year adjusted earnings of $39.9 billion on Thursday, more than double the $19.3 billion it posted in 2021, buoyed by strong performance in its business. gas marketing. Shares of the company rose 2.6% in London at midday.

Just over 40% of Shell’s full-year profit came from its integrated gas business, which includes commercial liquefied natural gas operations. The unit was responsible for nearly two-thirds of Shell’s $9.8 billion profit in the last three months of the year.

Shell CEO Wael Sawan said the results “demonstrate the strength of Shell’s differentiated portfolio, as well as our ability to deliver vital energy to our customers in a volatile world.”

The gains are the latest in a series of record results from the the largest energy companies in the worldwhich have enjoyed windfall profits thanks to rising oil and gas prices.

ExxonMobil posted this week Registration annual earnings of $59.1 billion. Last month, Chevron

reported a record full-year profit of $36.5 billion.

That has led to renewed calls for higher taxes. The governments of the European Union and the United Kingdom have already imposed extraordinary taxes on the profits of oil companies, with the profits being used to help households struggling with rising energy bills.

Shell said it expected to take an additional tax charge of $2.3 billion in 2022 related to the EU windfall tax and the UK energy profits tax. The company paid $13.1 billion in taxes globally in 2022.

Shell also announced another $4 billion share buyback program that it expects to complete in May and confirmed it would. raise your dividend per share by 15% for the fourth quarter.

The company returned $26 billion to shareholders in 2022 through share buybacks and dividend payments.

By comparison, it spent about $21 billion on its low- or zero-carbon businesses last year, or about a third of total spending, chief financial officer Sinead Gorman told reporters on a call Thursday.

Of that, about $4 billion was invested in its Renewables and Energy Solutions business, which includes electricity generation, hydrogen production, carbon capture and storage, and carbon credit trading.

The unit generated less than 5% of group profits in 2022, highlighting the magnitude of the challenge Shell faces as it seeks to move away from oil and gas towards lower carbon energy.

The company drew criticism from climate activists on Thursday for not acting fast enough.

“Shell cannot claim to be in transition as investments in fossil fuels eclipse investments in renewables,” Mark van Baal, founder of shareholder activist group Follow This, said in a statement.

“Most of Shell’s investments remain tied to the fossil fuel business because the company does not have a target to reduce its total CO2 emissions in this decade.”

Shell invested around $12.4 billion in its integrated oil and gas exploration units in 2022.

Asked if Shell could invest more in renewable energy, Sawan said he believed the company was “finding the right balance in our capital allocation.”

It said Shell was on track to cut emissions from its own operations in half by 2030 compared to 2016 levels. More than 90% of Shell’s emissions come from customers’ use of its products. It plans to reduce these so-called “scope 3” emissions by 20% by 2030.

Shell plans to become a net zero emissions company by 2050.

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