British energy giant Shell recorded the highest profit in its history in 2022 and announces massive redistributions to its shareholders, stoking calls for more taxes and criticism from environmental NGOs.
Shell saw its net profit climb to $42.3 billion. It more than doubled thanks to the surge in hydrocarbon prices, driven by the rebound in post-pandemic demand and by the drop in Russian exports after Moscow’s invasion of Ukraine.
Shell’s spectacular results follow those of its American rivals. ExxonMobil reported record 2022 profit of $55.7 billion on Wednesday, and Chevron last week posted annual net profit more than doubled to $35.5 billion.
Shell’s adjusted net profit (i.e. excluding exceptional items), the ratio most followed by analysts, came to 39.9 billion dollars, despite an after-tax charge of 3.8 billion in 2022 linked to the phasing out of oil and gas activities in Russia.
These results “demonstrate the strength of Shell’s differentiated portfolio, as well as our ability to provide life-saving energy to our customers in a volatile world,” said new chief executive Wael Sawan, who replaced Ben van Beurden, in a statement. 1er January.
But environmental NGOs denounce these record profits and call for the oil giants to contribute more to the climate emergency.
“Shell profits from the destruction of the climate and the immense human suffering”, denounced in a press release Elena Polisano, of Greenpeace UK, whose activists demonstrated Thursday in front of the group’s headquarters in London.
The NGO also says four of its activists have climbed onto a Shell platform near the Canary Islands, and says world leaders “should force historic mega-polluters to fund” a fund “for losses and damage caused by the climate crisis. “.
Exceptional taxes
“I am convinced that the world needs a balanced energy transition”, therefore without immediately doing without investments in fossil fuels, argued Mr. Sawan during an online press conference, indicating that a third of the group’s investments are focused on energy transition.
“I don’t think we’re moving fast enough as a planet,” he admitted, however. But to do better, “it requires a significant change in government policies, strong customer buy-in and, of course, companies like ours continuing to invest,” he said.
It is possible that Mr. Sawan, a former director of renewables at Shell, “gives extra attention to the transition” energy of the group, according to Richard Hunter, analyst of Interactive Investor.
But in the meantime “the renewable energy market is complicated” with “unproven or simply unprofitable technologies that make progress difficult”, continues the analyst, who notes that Shell shows a loss of 1.06 billion dollars for last year in this segment.
The British government introduced in May, then increased at the end of the year to 35%, a tax on exceptional energy profits, as did the EU which adopted a “temporary solidarity contribution” at the end of September.
Shell said in early January that it was planning a $2 billion slate for these one-off taxes in the fourth quarter, and said it was reviewing its investments in the UK as a result – a process still ongoing.
“We continue to believe in the significant potential for energy investment in the United Kingdom” but such taxes are “destabilizing for an industry which invests in order to be able to make a profit in 10, 15, 20 years”, he justified.
The oil and gas giant is launching a $4 billion share buyback program on Thursday along with a 15% dividend hike for the fourth quarter of last year.
In total, Shell is distributing $26 billion to its shareholders for 2022, making NGOs cringe, even as investors cheer, and the group’s stock soared 2.73% shortly before 12 p.m. London time.
For the environmental NGO Friends of the Earth, taxation must be accelerated. It is “simply staggering” to see such profits in the midst of the cost of living crisis, which sees “millions of people faced with the impossible choice of putting food on the table or heating their homes”.