01 February 2024 , 08:48
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Shell has reported a drop in annual profits for 2023 due to lower oil and gas prices.
The oil giant's adjusted earnings, including taxes, were £22.4 billion ($28.3 billion), a decrease of 29% from 2022 when high oil prices led to record profits. Underlying earnings also fell by 19% to £54.1 billion ($68.5 billion), down from £66.6 billion ($84.3 billion) the previous year.
This comes after oil prices dropped last year following significant increases in 2022 due to Russia's invasion of Ukraine. However, Shell saw a 17% increase in underlying earnings, including taxes, to £5.8 billion ($7.3 billion) in the final quarter of 2023.
The company also plans to deliver more returns for shareholders, with another £2.8 billion ($3.5 billion) in share buybacks this quarter. Shell's chief executive, Wael Sawan, said the group "delivered another quarter of strong performance".
He added: "As we enter 2024 we are continuing to simplify our organisation with a focus on delivering more value with less emissions." Shell has come under heavy fire over the past year amid accusations it is prioritising shareholder returns over net zero goals.
Shell profits soar to £32billion as millions struggling to pay energy bills
Its green credentials were in focus again on Thursday as Greenpeace activists protested outside its London headquarters dressed as partying Shell board members. Greenpeace campaigners said the oil group should pay some of its profits into a fund agreed at Cop28 climate talks last month to help pay for loss and damage caused by climate change.
In July last year, Shell abandoned one of its green pledges, which was to cut oil production by 1% to 2% each year until the end of the decade, saying it had already met the goal. But this was largely as a result of it selling off some oil and gas fields, which meant the company’s production was already lower than it would have been in 2030 under the old plan.”
Shell and the wider oil and energy sector are also under pressure to pay more in windfall taxes as households have struggled amid high energy bills since Russia’s war with Ukraine. The group results laid bare the impact of hefty impairments on its bottom line after announcing earlier this month it was facing up to 4.5 billion US dollars (£3.6 billion) of charges for the final quarter of 2023.
Shell was also recently reported to have paused all shipments through the Red Sea due to Houthi attacks on vessels. Chief financial officer Sinead Gorman said the firm was making decisions over the route on an “hour by hour” basis, but that the safety of its workers and ships was of “paramount importance”.
She said alternative routes added 10 to 15 days on to journeys, but that Shell was less affected than many rivals.
The group is also cutting roles across the group as part of cost savings, but Ms Gorman did not say how many were affected and that jobs were also being created. Ms Gorman said contractor jobs were being stripped out first, in particular in IT divisions.
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