Shell profit tumbles on lower oil prices

Shell profit tumbles on lower oil prices

Shell's net profit reached $19.4 billion in 2023
Shell's net profit reached $19.4 billion in 2023. Photo: JUSTIN TALLIS / AFP/File
Source: AFP

Shell said Thursday that its net profit more than halved to $19.4 billion in 2023 on lower energy prices, after rocketing to a record peak the previous year following the Ukraine conflict.

Post-tax profit slumped 54 percent after reaching an all-time high of $42.3 billion in 2022, when energy producer Russia's invasion of Ukraine sent oil and gas prices soaring, boosting earnings across the industry.

"Full year 2023 income... reflected lower realised oil and gas prices, lower volumes, and lower refining margins," Shell added in the earnings release.

It was also slammed by impairment and other accounting charges totalling $7.5 billion.

Revenue dived almost a fifth percent to $316.6 billion.

Shell will nevertheless return $3.5 billion to shareholders while it also ramped up the fourth-quarter dividend, sparking fresh fury from environmentalists.

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'Good progress'

"Shell delivered another quarter of strong performance, concluding a year in which we made good progress," insisted chief executive Wael Sawan.

"As we enter 2024 we are continuing to simplify our organisation with a focus on delivering more value with less emissions."

The sector had reaped bumper profits in 2022, when oil prices jumped also on keen demand in the post-pandemic economic recovery.

Prices have since declined but remain elevated amid concerns that the Israel-Hamas conflict could spread into a broader conflict in the crude-rich Middle East.

Shell added Thursday that net profit tumbled 93 percent to $474 million in the fourth quarter on large impairments, particularly linked to chemical assets in Singapore.

Adjusted net profit excluding exceptional items sank nearly a third to $28.3 billion last year -- but this beat market expectations.

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The group's share price gained 1.5 percent to £24.84 in early morning deals on the rising London stock market.

"A wavering oil price was inevitably the main culprit for the reduced full-year result," said Richard Hunter, head of markets at trading firm Interactive Investor.

Shell has sought to reinvent itself under the company's former renewables boss Sawan, who took the helm at the start of 2023.

The fossil fuels giant insists that its overall goal to achieve net zero carbon emissions by 2050 remains intact.


The group's latest huge annual profit prompted fresh anger from the environmental lobby.

Greenpeace activists dressed as Shell board members to protest outside the company's London headquarters on Thursday.

"Shell is posting yet more obscene profits from climate-wrecking fossil fuels," said Greenpeace campaigner Maja Darlington.

"While customers struggle with the cost-of-living crisis, Shell shovels over billions to shareholders and drills for yet more oil and gas, climate disasters are multiplying and hitting hardest those who have done the least to cause the crisis."

Source: AFP

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