Shell profits double to nearly $40 billion

Hong Kong / London
CNN
–

Shell set a record About $40 billion in 2022, more than twice as much rake in previous year after Oil and gas prices have gone up After the Russian invasion of Ukraine.

Europe’s largest oil company by revenue reported an adjusted annual profit of $39.9 billion on Thursday — more than double the $19.3 billion it made in 2021 — driven by strong performance in its gas trading business. The company’s shares were up 2.6% at midday in London.

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

Wael Sawan, Shell’s chief executive officer, said the results “demonstrate the strength of Shell’s premium portfolio, as well as our ability to provide vital energy to our customers in a volatile world.”

The earnings are the latest in a string of previously record results The largest energy companies in the worldwhich enjoyed bumper profits on the back of soaring oil and gas prices.

ExxonMobil published this week Record Full year earnings of $59.1 billion. Last month, Chevron

(CVX) It posted a record full-year profit of $36.5 billion.

This has led to renewed calls for higher taxes. Governments in the European Union and the United Kingdom have already levied windfall taxes on oil companies’ profits, with the proceeds being used to help families struggling with soaring energy bills.

Shell said it expects to impose an additional $2.3 billion in taxes in 2022 related to the windfall profits tax in the European Union and the energy dividend tax in the United Kingdom. The company paid $13.1 billion in taxes globally in 2022.

Shell also announced another $4 billion share buyback program it expects to complete by May and has confirmed it will complete raise its profits per share down 15% for the fourth quarter.

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

By comparison, it spent about $21 billion on its low- or zero-carbon business last year, or roughly a third of all spending, Chief Financial Officer Sinead Gorman told reporters on a conference call Thursday.

Of that, about $4 billion has been 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 the group’s profits in 2022, highlighting the scale of the challenge Shell faces as it tries to shift away from oil and gas toward low-carbon energy.

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

“Shell cannot claim to be in transition as long as investments in fossil fuels dwarf investments in renewables,” Mark Van Pal, founder of the activist shareholder group Follow This, said in a statement.

“The bulk of Shell’s investment continues to be related to the fossil fuel business because the company does not have a target to reduce total CO2 emissions this decade.”

Shell will invest about $12.4 billion in integrated gas and oil exploration units in 2022.

When asked if Shell could invest more in renewable energy, Sawan said he believes the company is “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 the use of its products by customers. It plans to reduce so-called “Scope 3” emissions by 20% by 2030.

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