Energy giant Shell’s annual profits surge to £32BN in wake of Russia’s invasion of Ukraine

Energy giant Shell’s profits rose to 32 billion pounds ($39.9 billion) in 2022 due to rising oil prices following Russia’s invasion of Ukraine.

The figure presented the highest profit for the company in its 115-year history and exceeded the expectations of industry experts.

It comes amid continued questions about the scale of taxes on windfall profits on energy producers, which have benefited from higher prices.

The London-listed oil major told investors that adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 53 percent from a year earlier, after energy prices catapulted higher. after the Russian invasion of Ukraine.

Adjusted earnings including tax more than doubled to $39.9bn (£32.2bn).

As Shell announced its results, Greenpeace activists set up a huge mock petrol station price board outside the company’s London headquarters. The 10-foot board shows the £32.2bn Shell made in profit in 2022, with a question mark next to the amount it will pay for weather loss and damage.

The figures are part of a debut set of results for Wael Sawan, who took over as chief executive officer earlier in the year.

Shell Chief Executive Wael Sawan said: ‘Our fourth quarter and full-year 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.

“We believe that Shell is well positioned to be the trusted partner during the energy transition.

‘As we continue to implement our Powering Progress strategy, we will build on our core strengths, further simplify the organization and focus on performance.

“We intend to remain disciplined while delivering compelling returns for shareholders, as evidenced by the 15 percent dividend increase and $4 billion share repurchase program announced today.”

Earlier this week, the new boss said he would combine his oil and gas and liquefied natural gas (LNG) production divisions as part of a review that will also reduce the number of executive roles at the company.

Responding to energy giant Shell’s record profits, the Liberal Democrats said Prime Minister Rishi Sunak failed to act on a proper windfall tax.

Lib Dem leader Sir Ed Davey said: “No company should make this kind of outrageous profit from Putin’s illegal invasion of Ukraine.”

‘Rishi Sunak was warned as chancellor and now as prime minister that we need a proper windfall tax for companies like Shell and has taken no action.

‘Families across the country are struggling to heat their homes and feed their families and this government turns around and says ‘there’s nothing we can do.’

“They need to properly tax oil and gas companies and at the very least make sure energy bills don’t go up again in April.”

Shell said it paid 1.5 billion pounds ($1.9 billion) in extra taxes to the UK and the EU.

Windfall profits by energy producers in 2022 prompted the government to launch a windfall tax, called the Energy Profits Levy, which was later tightened by Chancellor Jeremy Hunt.

Shell has pledged to be a net-zero carbon company by 2050 and has said its total carbon emissions peaked in 2018 at around 1.7 billion tonnes.

Its rival BP said on Monday that while the war between Ukraine and Russia could speed up the global transition from fossil fuels, it added in a report that “oil will continue to play an important role in the global energy system for the next 15 to 20 years.” “. ‘.

The invasion of Ukraine a year ago by its neighbor Russia sent oil and gas prices soaring.

Russia is a major producer of fossil fuels, and the war led to a drastic reduction in supplies.