Oil giant Shell celebrates 14-fold rise in profits in ‘momentous year’ as families face surging energy bills
Shell has recorded a fourteen-fold increase in quarterly profits amid soaring prices for oil and gas, reigniting calls for a windfall tax to relieve the burden on households as bills surge.
The energy giant recorded a $16.3bn (£12bn) pre-tax profit in the fourth quarter of last year, compared with just $1.2bn (£885.5m) in the third quarter. Shell’s adjusted earnings reached $19.2bn (£14.bn) in 2021, more than four times its level a year earlier.
The average price Shell received for its gas more than doubled in six months to $8.88 (£6.55) per thousand cubic feet.
Shell’s upstream business – which extracts fossil fuels from the ground – also enjoyed an 18 per cent jump in the price at which it sold oil.
While consumers and businesses are being hit by sky-high energy prices, which have pushed up the cost of living, Shell’s shareholders are in line for a bumper payday.
Chief executive Ben van Beurden said he plans to return $8.5bn to investors by buying back their shares.
“Today we are stepping up our distributions with the announcement of an 8.5 billion dollar share buyback programme and we expect to increase our dividend per share by around 4 per cent for Q1 (first quarter) 2022,” he said in an update to the stock market on Thursday.
Gas prices have been pushed up in the last year for several reasons, including unusually still winds in Europe, Russia restricting supply and China buying up more international gas shipments.
Mr van Beurden added: “We have a compelling strategy, with customers at its core. We have ambitious plans to generate shareholder value, to decarbonise our products and to provide energy to our customers while respecting nature.”
The profits announcement came as energy regulator Ofgem prepared to unveil what is expected to be a 50 per cent increase in energy bills for millions of households.
Labour’s shadow Treasury chief secretary Pat McFadden said the figures underlined why a windfall tax was the best way to fund support on energy bills for UK households.
“They are planning share buybacks and increased dividends but they are not being asked to pay a penny towards the package,” he told Sky News.
Taking aim at Chancellor Rishi Sunak, Mr McFadden said: “He is not asking the oil and gas companies – who are making the most out of this – to pay a single penny towards this.
