Shell profits double to nearly $40 billion

Hong Kong/London

Shell made the entry Profits of nearly $40 billion in 2022, more than double the previous year after oil and gas prices rose following Russia’s invasion of Ukraine.

Europe’s biggest oil company by revenue on Thursday reported adjusted full-year earnings of $39.9 billion, more than double the $19.3 billion it posted for 2021, driven by strong performance in gas trading in the field. The company’s shares were up 2.6% in midday trading in London.

Just over 40% of Shell’s full-year revenue came from its integrated gas business, which includes LNG trading 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 chief executive Val Savan 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.”

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The earnings are the latest in a string of record-setting results for the world’s biggest energy companies, which have made significant gains on rising oil and gas prices.

ExxonMobil this week posted a record full-year profit of $59.1 billion. Last month, Chevron ( CVX ) reported a record full-year profit of $36.5 billion.

This has led to renewed calls for higher taxes. The European Union and UK governments have already imposed windfall taxes on oil company profits, with the proceeds used to help households struggling with rising energy bills.

Shell said it is set to collect $2.3 billion in additional taxes in 2022 from the EU’s windfall tax and the UK’s Energy Profits Levy. The company paid $13.1 billion in taxes worldwide in 2022.

Shell also announced another $4 billion share buyback program, which it plans to complete by May, and confirmed it will increase its dividend per share by 15% in the fourth quarter.

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

By comparison, the company spent about $21 billion on its low- or zero-carbon businesses last year, or about one-third of its total spending, Chief Financial Officer Sinead Gorman told reporters on Thursday.

Of that, about $4 billion was invested in the renewable energy 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, underscoring the scale of Shell’s challenge as it seeks to transition from oil and gas to lower-carbon energy.

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

“Shell cannot claim to be in transition as long as investment in fossil fuels is less than investment in renewable resources,” Mark van Baal, founder of shareholder activist group Follow This, said in a statement.

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“The majority of Shell’s investments remain in fossil fuel companies, as the company has no target to reduce overall CO2 emissions this decade.”

In 2022, Shell invested approximately $12.4 billion in its integrated gas and oil exploration units.

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

He said Shell is on track to halve emissions from its operations by 2030 compared to 2016 levels. More than 90% of Shell’s emissions come from customers using its products. It plans to reduce these so-called scope 3 emissions by 20% by 2030.

Shell plans to become a zero emission company by 2050.


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