Shell made a record profits of nearly $40 billion by 2022, more than double what it earned last year after rising oil and gas prices following Russia’s invasion of Ukraine.
Europe’s biggest oil company by revenue reported revised full-year profit of $39.9 billion on Thursday – more than double the $19.3 billion it posted in 2021 – driven by a strong performance of its gas trading business. The company’s stock was up 2.6% in London at midday.
Just over 40% of Shell’s annual income comes from its integrated gas business, which includes liquefied natural gas trading operations. The unit was responsible for nearly two-thirds of Shell’s $9.8 billion in revenue in the last three months of the year.
Shell CEO Wael Sawan said the results “demonstrate the strength of Shell’s diverse portfolio, as well as our capacity to deliver significant energy to our customers in a volatile world.”
The earnings are the latest in a string of record-setting results for the world’s biggest energy company, which has enjoyed bumper profits thanks to rising oil and gas prices.
ExxonMobil this week posted record full-year revenue of $59.1 billion. Last month, Chevron (CVX) reported a record full-year profit of $36.5 billion.
That led to renewed calls for higher taxes. Governments in the European Union and the United Kingdom have already imposed windfall taxes on oil company profits, with the proceeds used to help households struggling with rising energy bills.
Shell said it expects to get an additional $2.3 billion in tax payments in 2022 related to the EU windfall tax and the UK energy income tax. The company paid $13.1 billion in taxes worldwide in 2022.
Shell also announced another $4 billion share buyback program expected to be completed in May and confirmed it will raise its dividend per share by 15% for the fourth quarter.
The company is returning $26 billion to shareholders in 2022 through share buybacks and dividend payments.
By comparison, it spent about $21 billion on low- or zero-carbon businesses last year, or roughly a third of the total, chief financial officer Sinead Gorman told reporters at a call on Thursday.
Of that, about $4 billion is invested in the Renewables and Energy Solutions business, which includes power generation, hydrogen production, carbon capture and storage, and the sale of carbon credits.
The unit will generate less than 5% of the group’s revenue by 2022, underscoring the scale of the challenge facing Shell as it tries to transition from oil and gas to low carbon energy.
The company drew criticism from climate activists on Thursday for not moving quickly.
“The shell cannot claim to be in transition as long as investments in fossil fuels are less investments in renewables,” Mark van Baal, founder of the shareholder activist group Follow This, said in a statement.
“The majority of Shell’s investments remain tied to fossil fuel businesses because the company has no target to reduce its total CO2 emissions this decade.”
Shell is investing about $12.4 billion in its integrated gas and oil exploration units in 2022.
Asked if Shell could invest more in renewable energy, Sawan said he believes the company has “found the right balance in our capital allocation.”
He said Shell is on track to cut emissions from its own operations in half by 2030 compared to 2016 levels. More than 90% of Shell’s emissions come from the use of its products by customers. It plans to reduce these so-called “scope 3” emissions by 20% by 2030.
Shell plans to become a net-zero emissions company by 2050.