Shell said last month that a wind tax imposed by the European Union and the United Kingdom following a surge in profits would cost the group about $2 billion.
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British oil giant Shell on Thursday posted its highest ever annual profit, boosted by rising fossil fuel prices and strong demand since Russia’s full-scale invasion of Ukraine last year.
Shell reported adjusted earnings of $39.9 billion for the full year 2022. This easily surpassed the $28.4 billion in 2008 that Shell said was the company’s previous annual record and more than doubled the company’s 2021 profit of $19.29 billion.
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Analysts polled by Refinitiv expect net profit in 2022 to hit $38.3 billion.
For the final quarter of 2022, Shell reported adjusted earnings of $9.8 billion.
Shell announced a $4 billion share buyback program, which is expected to be completed in the first quarter of 2023 results – to be launched in early May – and a 15% increase in dividends per share for the fourth quarter.
“Our results in Q4 and throughout the full year demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver essential energy to customers in a volatile world,” Shell CEO Wael Sawan said in his first earnings statement since taking up the role on January 1.
“We believe that Shell is in a good position to be a reliable partner through the energy transition. As we continue to implement the Powering Progress strategy, we will build on our core strength, further simplify the organization and focus on performance,” he added.
Shell said its cash capital expenditure outlook for 2023 is between $23 billion and $27 billion.
The results follow a historic annual earnings streak for US oil majors Exxon Mobil and Chevron, with the West’s largest oil and gas company expected to post a combined profit of nearly $200 billion for the year, according to Refinitiv data.
The extraordinary scale of the industry’s earnings has renewed criticism and triggered calls for a Big Oil profit windfall tax.
Shell said last month that it would lose $2 billion for the last three months of 2022 as a result of new taxes in the European Union and the United Kingdom.
Shares of the London-listed company are up about 1% annually.
‘Energy trilemma’
Shell, which aims to become a net-zero emissions business by 2050, said adjusted earnings for its Energy and Renewable Solutions unit came in at $293 million in the three months ending 2022, down from $383 million in the third quarter.
In recent quarters, Big Oil executives have defended rising profits and said significant disruptions in global energy markets due to the war in Ukraine have reaffirmed the importance of helping solve the “energy trilemma.”
According to a statement to investors from BP CEO Bernard Looney late last year, it represents “safe, affordable and low-carbon energy.”
Climate campaigners and activist shareholders have been very critical.
“We all need to call out this kind of profiteering,” said Alice Harrison, fossil fuel campaign leader at the advocacy group Global Witness.
Harrison described the historic profits for the energy giant as “deceptive”, because “much of this money was made at the expense of millions of people who have been impoverished by rising gas costs.”
US oil giant Exxon Mobil on Tuesday reported a profit of $56 billion for 2022, marking a historic high for the Western oil industry, while Chevron on Friday reported a profit of $36.5 billion for last year.
British oil major BP is scheduled to report full-year earnings on Feb. 7, with France’s TotalEnergies scheduled to do so on Feb. 8.