HomeBreaking News#Shell Accused Of ‘Profiteering Bonanza’ After Record First-Quarter Profits Of $9.6bn

#Shell Accused Of ‘Profiteering Bonanza’ After Record First-Quarter Profits Of $9.6bn

Shell has been accused of a “profiteering bonanza” after it made record first-quarter profits of more than $9.6bn (£7.6bn) and showered shareholders with more than $6bn, even as oil and gas prices tumbled from last year’s highs.

The better than expected profits in the first three months of this year were well above the $7.96bn predicted by industry analysts, and topped Shell’s previous first-quarter record set last year at $9.1bn for the same period.

Europe’s biggest oil and gas company handed shareholders $2bn in dividend payments and bought back shares worth $4.3bn over the last quarter, and plans to offer its investors another $4bn in share buybacks over the next three months.

The FTSE 100 company said profits increased despite higher taxes and lower sums paid on the market for the oil and gas it produces, thanks in part to its energy trading teams managing to mitigate against falling prices.

Global oil prices averaged $81.7 a barrel in the first quarter of this year, according to Shell, down from $102.2 a barrel in the same period a year earlier, when Russia’s invasion of Ukraine ignited a surge in oil and gas markets.

Shell has also had to pay higher taxes, reaching over $3bn globally for the last quarter. Its UK tax bill hit $134m last year after the government’s windfall energy profits levy was introduced in May. Shell expects to pay more than $500m to the Treasury this year after the levy was increased from January.

Shell’s bumper profits emerged two days after its smaller rival BP reported a profit of $4.96bn for the first quarter, down from $6.2bn in the same period last year, but well above the $4.3bn expected by analysts.

Sharon Graham, the general secretary of the Unite union, said both firms were “continuing the profiteering bonanza”, adding: “The scale of profiteering displayed today by Shell and earlier this week BP is one of the corporate scandals of our times. And this is practically untouched by Rishi Sunak’s so-called windfall tax.

“Not taking any action against ‘Big Oil’ means the profiteering plundering will continue without end.”

Charlie Kronick, of Greenpeace UK, said: “As temperatures soar from Madrid to Mogadishu, Shell is once again posting bumper profits while promising to keep extracting fossil fuels for years to come. Millions around the world are already feeling the effects of the climate crisis and it’s those who did the least to cause it who are paying the heaviest price.

“The UK government should stop issuing new oil and gas licences and force Shell and the rest of the industry to start using their obscene profits to pay for the damage that their fossil fuel habit is causing to lives and livelihoods around the world.”

Shell’s new chief executive, Wael Sawan, said the company had delivered “strong results and robust operational performance, against a backdrop of ongoing volatility”.

The company reported a record annual profit of $40bn for 2022 after posting better than expected profits in the final quarter of last year. The full-year profits were more than double what it reported in 2021 owing to rocketing oil and gas market prices last year, leading to calls for a windfall tax on the earnings.

A survey commissioned by Christian Aid, an international development charity, found nearly four in five UK adults agreed it was wrong for oil and gas companies to make record profits without taking responsibility for their role in causing the climate crisis. More than six in 10 of those surveyed said the government should tax fossil fuel profits to help pay compensation to communities that faced the impacts of the climate crisis.

Sawan succeeded Shell’s previous chief executive Ben van Beurden in January after the company moved its headquarters to London from the Hague and abolished its dual listing in the Netherlands.

He is now preparing to lead a capital markets day next month where he is expected to set out an updated strategy for the oil company. It is expected to include an exit from the UK’s home energy supply market after a little over five years by selling off Shell Energy.

Sawan told journalists the home energy business had been “very, very challenging” owing to significant government intervention to support the market.

“On balance, what we have found is that it’s not the sort of area where we can potentially outcompete others,” he said. “We’re looking at all options, everything is being considered, and I hope to have an update in the coming weeks.”


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