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Shell reports record profits on back of soaring energy prices

By Nagasunder in UK Business News, posted February 3, 2023

Shell has revealed annual profits of $39.9 billion (£32.2 billion), more than double from the previous year and smashing its previous record of $31 billion in 2008.

The company also reported record fourth-quarter earnings of $9.8 billion (£7.9 billion) as thousands of Brits struggle to cope with massive rises in energy costs.

Profits were even higher than the $38.17 billion (£30.8 billion) analysts had predicted.

The profits are largely thanks to high gas prices as a result of Russia's invasion of Ukraine, which caused countries to wean themselves off Russian fuel imports.

The majority of profits were generated by Shell's gas operations.

It is the latest energy company to report record profits as prices rose as a result of the invasion.

Exxon Mobil reported a massive net profit of $56 billion (£45.25 billion) in 2022, a record high for the entire Western oil industry.

Shell will face an estimated $2.3 billion (£1.86 billion) in charges for the entire year as a result of these taxes, the company said on Thursday.

Shell estimated in January that those tax payments would cost the company around $2 billion (£1.7 billion) in the final three months of its fiscal year.

The UK windfall tax, announced by Rishi Sunak as chancellor, requires oil and gas companies to pay a 25 percent levy on profits while receiving tax breaks worth 91 pence for every £1 invested.

Shell chief executive Wael Sawan said: "Our results in Q4 and across the full year demonstrate the strength of Shell's differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world.

"We believe that Shell is well positioned to be the trusted partner through the energy transition."

It comes after a year in which consumers struggled with rising energy costs, which contributed to persistent double-digit inflation.

The average price of a litre of unleaded gasoline reached a record high of 191.5 pounds in July, capping off a successful year for Shell.

It reported operating profits of $9.5 billion for the third quarter in October, which was lower than the previous three months but still more than double the same period in 2021.

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For the second quarter, a record $11.5 billion profit was announced, more than doubling the 2021 figure of $5.5 billion (£4.5 billion).

In addition, the first quarter saw a record operating profit of $9.1 billion.

Source: Sky News

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