Shell earnings plunge from record high as oil prices fall
SHELL’S profits have tumbled by almost 30pc on the back of falling oil and gas prices.
The British energy giant reported earnings of $28.3bn (£22.3bn) for 2023, down more than $10bn compared to 2022’s record $40bn.
However, profits in 2023 were still above any other year since 2011 when setting aside 2022’s stellar performance. Strong performance was driven by its gas trading division, which delivered earnings of $14bn for the year and $4bn in the last quarter alone.
Profits dropped sharply as wholesale oil and gas prices declined from peaks reached in 2022 after Russia’s invasion of Ukraine.
Wael Sawan, the chief executive of Shell, took over the company in January 2023 and has refocused the business on oil and gas to win over investors.
The company last summer dropped a pledge to cut oil production each year for the rest of the decade.
Mr Sawan yesterday talked up Shell’s increased output. He said: “The projects which came onstream this past year at their peak will add over 200,000 barrels of oil equivalent a day.
“They are part of our larger funnel set for start-up by 2025. Together at their peak, all projects will add more than half a million barrels of oil equivalent a day to our production.
“They will enable us to continue providing the energy security that the world needs while delivering cash flow longevity into the future.”
Meanwhile, Greenpeace activists yesterday staged a mock party outside the company’s London head office as Shell announced its results, with activists dressed as executives quaffing champagne and dancing around a burning sign which read “Your Future”.
Mr Sawan tried to address claims that the company’s profits come from damaging the planet, pointing out that Shell had cut emissions of greenhouse gases from its own operations by up to 60pc. Shell last year also invested $5.6bn in “low carbon” energy projects including offshore wind farms and plans for Europe’s largest electrolyzer, which will make hydrogen out of water.
Mr Sawan said: “In short, we’re working hard to deliver the energy the world needs today. And we’re helping to build the energy system of the future.”
Shell’s renewables business was its worst performing division last year, with profits down by $1bn to $705m. Most projects were loss-making, Shell said. Losses on green investments were more than offset by profits of $10bn at its upstream division, which covers oil and gas. Shell’s shares rose 2.6pc.