Shell has reported a bumper annual profit of more than $28bn for 2023 — a year in which $23bn was distributed to shareholders — as Europe’s biggest oil company faced more protests from climate campaigners over claimed back-tracking on renewables pledges.
Shell’s adjusted earnings hit $7.3bn in the final quarter of 2023, bolstered by revenues from its liquefied natural gas business. Its full-year profit was the second highest since 2011, although a third lower than the record earnings posted in 2022.
“Shell delivered another quarter of strong performance,” said CEO Wael Sawan, as the company responded by raising its dividend again and announcing more share buybacks.
Sawan said the company was making good progress toward targets outlined at its last Capital Markets Day, held in June 2023.
Since taking the helm one year ago, the CEO has refocused Shell’s approach to the energy transition in improve rates of return and strengthen share value.
The strategy he has led has meant increasing the focus on core oil and gas investments and retrenching the low-carbon portfolio away from stand-alone renewables and toward low carbon business perceived to be more profitable.
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Shell’s streamlining process includes a pledge to cut annual capital expenditure to $22bn-$25bn a year, down from $23bn-$27bn up to 2023, as well as delivering structural operating cost reductions of $2-3bn by the end of 2025.
The company states that achieving those reductions “will require portfolio high grading, new efficiencies and a leaner overall organisation”.
Observers say Shell’s low carbon businesses have absorbed a higher proportion of senior management cuts than other sectors, although Shell does not confirm this.
Shell still spent $5.6bn on low-carbon energy projects in 2023 representing 23% of total capital expenditure.
In an online presentation of the results, Sawan highlighted Shell’s $2bn purchase of Danish biogas producer Nature Energy. He also mentioned the Crosswind joint venture whose Hollandse Kust North wind farm has started providing renewable power for the 200MW Holland Hydrogen 1, described as Europe’s largest electrolyser.
But climate campaign groups accused Europe’s biggest oil company of back-pedalling on earlier commitment to lead the energy transition by shifting investments much more decisively toward clean energy, and phasing out fossil fuels.
As Shell was publishing its results today (Thursday), Greenpeace activists dressed as Shell executives stated a mock champagne party outside the company’s London headquarters, arguing that the company of spending six times more on shareholder payouts than the amount earmarked for renewables in 2023.
“Shell is posting yet more obscene profits from climate-wrecking fossil fuels. 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,” stated Maja Darlington, campaigner at Greenpeace UK
Greenpeace accused Sawan of “shredding the company’s green strategy, abandoning planned production cuts and slashing investment and jobs from Shell’s renewables division”, and criticised the company for what it described as “ramping up gas production and exploring for for new oil and gas”.