Shell said last month that profit taxes imposed by the European Union and Britain would cost the group about $2 billion.
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British Oil Company Shell On Thursday, it posted its highest annual profit since Russia’s full-scale invasion of Ukraine last year, boosted by rising fossil fuel prices and strong demand.
Shell announced a full-year 2022 adjusted profit of $39.9 billion. That surpassed $28.4 billion in 2008, the company’s previous record, and more than double the company’s full-year 2021 profit, Shell said. $19.29 billion.
Analysts polled by Refinitiv expected full-year 2022 net profit of $38.3 billion.
For the final quarter of 2022, Shell posted adjusted earnings of $9.8 billion.
Shell announced a $4 billion share buyback plan, which is expected to be completed by its first-quarter 2023 results – to be released in early May – and a 15% per share dividend increase in the fourth quarter.
“It’s been a big year for Shell and a big year to look back on,” Shell CEO Wael Sawan told CNBC’s Steve Sedgwick in his first earnings interview since taking over on January 1.
“I feel privileged to be stepping into this role at such a huge juncture in the company’s history. As we look forward, I think we have a unique opportunity to be a winner in the energy transition. We have a portfolio that I think is second to none,” Chavan said.
“My focus will be more on efficiency and capital discipline,” he added.
The results follow in the footsteps of historical annual returns for US oil companies Exxon Mobil And ChevronThe combined profits of the West’s largest oil and gas companies are expected Almost $200 billion per year, according to Refinitiv data.
The extraordinary size of the industry’s revenue has renewed criticism and prompted calls for a big oil boom profits tax.
Shell said Last month, new taxes in the EU and UK were expected to take a $2 billion hit for the final three months of 2022.
“Ultimately, taxes are a matter for governments to decide. We, of course, engage and provide perspectives and the main perspective we are trying to provide is that companies like us need to invest billions of dollars to support. The energy transition requires a safe and stable investment environment,” Chavan said.
“For example, windfall taxes or price caps simply erode confidence in that investment stability, so I worry about some of the moves being made,” he continued.
“I think there needs to be a different approach to really attract investment capital at a time when energy security needs to be embedded in the wider energy system in Europe.”
Shares of the London-listed company were up 0.6% in early morning trading on Thursday.
Shell said its cash capital expenditure outlook for 2023 is between $23 billion and $27 billion. Of that, Chavan says, roughly a third will go into areas like renewables.
Shell, which aims to become a net-zero emissions business by 2050, said adjusted revenue for its renewables and energy solutions unit came in at $293 million in the final three months of 2022, down from $383 million in the third quarter.
“Shell cannot be said to be in transition until investments in fossil fuels reduce investments in renewables,” said Mark van Paul, founder of the Dutch group.
“The majority of Shell’s investments are tied to fossil fuel businesses, as the company does not have the target of reducing its total CO2 emissions this decade, as it needs to achieve in Paris.”
In recent quarters, Big Oil executives have defended their soaring profits and reaffirmed the importance of helping resolve the “energy trilemma,” a significant disruption to global energy markets caused by the war in Ukraine.
According to BP CEO Bernard Looney in a statement to investors late last year, it represents “safe, affordable and low-carbon energy”.
Climate campaigners and activist stakeholders have been harshly critical.
“Shell’s annual profits have doubled in the past year, while millions of people face the impossible choice between putting food on the table and heating their homes, which is simply staggering,” said Sana Youssef, climate campaigner at Friends of the Earth.
“People can see the injustice of paying eye-watering energy costs when big oil and gas companies are raking in billions,” Yusuf said.