Shell said last month that unexpected taxes imposed by the European Union and the United Kingdom in the wake of the profit increase would cost the group about $2 billion.
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British oil giant shell On Thursday, it posted its highest annual profit on record, buoyed by skyrocketing fossil fuel prices and strong demand since Russia’s all-out invasion of Ukraine last year.
Shell reported adjusted earnings of $39.9 billion for the full year 2022. That comfortably exceeds the $28.4 billion in 2008 which Shell said was the company’s previous annual record and is more than double the company’s 2021 earnings for the full year of 2021. $19.29 billion.
Analysts surveyed by Refinitiv expected 2022 net profit to be $38.3 billion.
For the fourth 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 by first-quarter 2023 results — due in early May — and an earnings per share increase of 15% for the fourth quarter.
“It’s a huge year for Shell, and a huge year to look at as well,” Shell CEO Wael Sawan told CNBC’s Steve Sedgwick in his first earnings interview since taking over on Jan. 1.
“I feel proud to be stepping into this role at such a fascinating point in the company’s history. As we look to the future, I believe we have a unique opportunity to be able to succeed as a winner in the energy transition. We have a portfolio that I think is second to none,” Sawan said.
“My focus will be very much on performance and capital discipline,” he added.
The results follow in the footsteps of the major US oil companies’ historic annual earnings Exxon Mobil And chevronas the largest oil and gas companies in the West are expected to reap a combined profit of Almost 200 billion dollars for the year according to Refinitiv data.
The extraordinary scale of the industry’s profits has renewed criticism and prompted calls for a windfall dividend tax on big oil.
shell He said Last month, it projected it would reach $2 billion for the last three months of 2022 as a result of new taxes in the EU and UK.
“At the end of the day, taxation is a matter for governments to decide. We, of course, share and provide perspectives and the main perspective we’re trying to provide is context around the fact that companies like us need to invest several billion dollars to support the energy transition and require a safe and stable investment climate,” Sawan said. .
He continued, “For example, unexpected taxes or price controls erode confidence in investment stability, and so I am concerned about some of the moves that are being made.”
“I think a different approach to take is to really attract venture capital at a time when we need to be able to embed energy security into the broader energy system here in Europe.”
Shares of the London-listed company rose 0.6% during morning trading Thursday.
Shell said its cash capital expenditure forecast for 2023 ranges between $23 billion and $27 billion. Of that, Sawan said, roughly a third if not a little more will go to areas such as renewables.
Shell, which aims to become a carbon-neutral company by 2050, said adjusted earnings for its renewable energy solutions unit were $293 million for the last three months of 2022, down from $383 million in the third quarter.
“Shell cannot claim to be in transition as long as investments in fossil fuels dwarf investments in renewables,” said Marc van Pal, founder of the Dutch group Follow This.
“The bulk of Shell’s investments are still related to the fossil fuel business, because the company does not have a goal of reducing total CO2 emissions this decade, as is required to reach Paris.”
In recent quarters, Big Oil executives have defended their rising earnings and said the significant turmoil in global energy markets due to the war in Ukraine has reaffirmed the importance of helping solve the “triple energy crisis”.
According to a statement from BP CEO Bernard Looney late last year, this stands for “safe, affordable, low-carbon energy.”
Climate activists and activist contributors have been highly critical.
“Shell’s annual profits more than doubled last year, while millions of people face the impossible choice between putting food on the table and heating their homes, is simply staggering,” said Sanaa Youssef, climate campaigner at Friends of the Earth.
“People can see the injustice of paying the horrific costs of energy while the big oil and gas companies reap billions,” Youssef said.
US oil giant Exxon Mobil on Tuesday mentioned $ 56 billion in profit for 2022, marking a historic high for the western oil industry, while Chevron on Friday Spread A record profit of $36.5 billion last year.
The major British oil company BP It is scheduled to report full-year earnings on February 7, with France Total energy It is set to follow on February 8th.