Shell profits jump as oil and gas prices rise

Soaring oil and natural gas prices boosted Shell’s profits in the fourth quarter of 2021, lifting adjusted earnings to $6.39 billion, up from $393 million a year earlier, the company reported today. Thursday.

Shell, Europe’s largest energy company, also said it would accelerate shareholder returns, buying back $8.5 billion of shares in the first half of 2022 – a big increase on the $3.5 billion total. USD for acquisition in 2021.

Shell also said it would increase its dividend paid to shareholders by 4%, to 25 cents per share in the first quarter.

In the short term, at least, Shell is implementing a strategy of using oil and gas proceeds to reward shareholders as well as to invest in new business areas such as hydrogen.

At the same time, Shell offered further indications that oil would play a diminishing role in the company’s future. The company said oil production has fallen 8% since 2019 and expects to decline by up to 2% annually this decade.

Shell said its liquefied natural gas business was a major contributor to higher earnings along with higher oil and gas prices. The company has a large fleet of liquefied natural gas carriers that can go directly to the areas that will receive the highest prices.

The fuel price boom, while beneficial to Shell and its shareholders, is of course relevant to consumers and governments, particularly in Europe, where utility bills have risen sharply and gas prices have risen. record high. In the UK, there have been calls from politicians and environmental groups for a gusty tax on gas producers’ profits.

In a call with reporters after the earnings announcement, Ben van Beurden, Shell’s chief executive, said that demand for oil and gas, in particular, has exploded in Asia, where China is growing moved to reduce coal consumption, while companies have limited investment during the pandemic and invested in what he calls the energy system of the future.

“We are struggling as an industry to keep up with supply,” he said.

He said Shell is redirecting liquefied natural gas shipments to Europe and the company’s retail utility business in the UK is taking on some customers other suppliers cannot cope with. excessive volatility” and crashed.

Mr van Beurden said the business, called Shell Energy, was also losing money, but was able to continue in business due to the financial strength of its parent company. Shell profits jump as oil and gas prices rise

Fry Electronics Team

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