Shell profit tumbles on falling oil and gas prices
British energy giant Shell said its net profit more than halved to US$19.4 billion last year as oil and gas prices weakened.
Profit a er tax slumped 54 per cent a er reaching an all-time high of US$42.3 billion in 2022, when energy producer Russia’s invasion of Ukraine sent prices of fossil fuels soaring.
“Full year 2023 income... reflected lower realised oil and gas prices, lower volumes, and lower refining margins,” Shell added in the earnings release.
It was slammed also by impairment and other accounting charges totalling US$7.5 billion. Revenue dived almost a fi h to US$316.6 billion.
Despite the declines, Shell said it was returning US$3.5 billion to shareholders and ramping up its fourth-quarter dividend.
“As we enter 2024 we are continuing to simplify our organisation with a focus on delivering more value with less emissions,” chief executive Wael Sawan said in the earnings statement.
Environmentalists were not convinced, however, with Greenpeace activists dressed as Shell board members protesting outside the company’s London headquarters on Thursday.
“Shell is posting yet more obscene profits from climatewrecking fossil fuels,” said Greenpeace campaigner Maja Darlington.
“While customers struggle with the cost-of-living crisis, Shell shovels over billions to shareholders and drills for yet more oil and gas. Climate disasters are multiplying and hi ing hardest those who have done the least to cause the crisis.”
Sawan, former head of renewable energy at Shell, plans in March to update the company’s strategy on transitioning to cleaner fuels.
“What you should expect coming in March is real clarity on what are the areas that we will continue to go forward with, not a whole bunch of new targets,” Sawan told a conference call listened to by analysts and media.
The fossil fuels giant insists that its overall goal to achieve net zero carbon emissions by 2050 remains intact.
This as the energy sector still looks to profit from the relatively high cost of oil and gas.
Prices are currently benefi ing from concerns that the Israel-Hamas conflict could spread into a broader conflict in the cruderich Middle East.
The group’s share price closed up 2.41 per cent at £25.06 on London’s benchmark FTSE 100 index, which ended slightly down overall.
Shell on Thursday added that net profit tumbled 93 per cent to US$474 million in the fourth quarter on large impairments, particularly linked to chemical assets in Singapore.
Net profit excluding exceptional items sank nearly a third to US$28.3 billion last year – but this beat market expectations.
“A wavering oil price was inevitably the main culprit for the reduced full-year result,” noted Richard Hunter, head of markets at trading firm Interactive Investor.
“From a broader perspective, and despite the current geopolitical tensions which have provided a base for the oil price, the uncertain economic environment globally has le the demand situation unclear.”
Hunter added: “The industry is the focus of some debate from an environmental perspective, with the ever-increasing possibility that some investors will be unwilling or unable to invest in the sector on ethical grounds.”