Ukraine war pushes Shell Oil profits to record $40 billion in 2022




LONDON, England: Energy giant Shell Oil has announced a record profit of nearly $40 billion in 2022, capping an eventful year that witnessed a surge in energy prices caused by Russia’s invasion of Ukraine, which saw shareholders receiving unprecedented returns.

Driven by higher oil and gas prices, robust refining margins and strong trading, the annual profit of $39.9 billion far exceeded the previous record of $31 billion in 2008, and more than doubled from the previous year.

It was also in line with those reported by US rivals earlier this week, which will pressure governments to further raise windfall taxes on the sector.

In a statement on the first set of earnings since he became the company’s head on 1st January, Shell Chief Executive Wael Sawan said, "We intend to remain disciplined while delivering compelling shareholder returns."

Amid a strong recovery in earnings from liquefied natural gas trading, Shell also posted a record fourth-quarter profit of $9.8 billion, which was greater than analyst forecasts of $8 billion.

Boosted by strong overall trading earnings due to gas price volatility, earnings from its LNG division reached $6 billion, also a record high.

Governments struggling with soaring energy bills have responded by imposing windfall taxes on the energy sector. Shell said in 2022 that it expects to pay accounting costs related to windfall taxes of some $2.4 billion.

In the fourth quarter, Shell increased its dividend by 15 percent, the fifth increase since it cut dividends by more than 60 percent in 2020 during the COVID-19 pandemic.

The profits helped Shell and other Western energy companies mask considerable write-downs on Russian assets, after they exited the country after the start of the Ukraine war.

However, Shell said this week that it continued to export some natural gas from Russia.

In the coming decade, the company aims to build a large renewables and low-carbon energy business, as part of its ambition to sharply reduce greenhouse gas emissions, it added.