Shell more than doubles third-quarter profit to £8.2 billion but oil price falls

Oil giant Shell continued to build on 2022’s record results as it added nearly 10 billion dollars in extra profit to its balance sheet as gas prices remained high.

The business said its adjusted earnings more than doubled to 9.5 billion dollars (£8.2 billion) in the three months to the end of September when compared with the year before.

But profits are down compared with the company’s second quarter, when it made 11.5 billion dollars (£9.9 billion), as the price of oil slowly began to fall after months of multi-year highs due to the war in Ukraine.

“We are delivering robust results at a time of ongoing volatility in global energy markets,” said Chief Executive Ben van Beurden.

Shell is now nine months into what promises to be the company’s most profitable year ever, barring an unlikely major collapse in oil and gas prices over the next two months.

Finance boss Sinead Gorman told reporters that the company had done enough over recent months to avoid the tax - which allowed companies to get tax relief in exchange for investment.

“Heavy capex (capital expenditure) has meant that we haven’t had extra tax coming through in this quarter yet,” she said.

“I do expect to see that extra tax … to happen quite early in the first quarter of 2023, but we’ll see what plays out with prices as well.”

She added: “We simply are investing more heavily than we have, and therefore we don’t have profits which we can be taxed against.”

The business was already benefiting from a global economy that had reopened after the pandemic and was desperate for energy to fuel its growth.

Then Russian President Vladimir Putin launched an unprovoked attack on Ukraine.

This pushed European gas prices to all-time highs and the price of oil soared internationally.

The months-long energy crisis led then-chancellor Rishi Sunak in May to introduce a windfall tax on oil and gas companies operating in the North Sea.

But that has not stopped Shell from handing billions of dollars to its shareholders this year.

On Thursday it announced plans to return another four billion dollars (£3.5 billion) to shareholders by buying back shares over the next three months, and said it will also increase the dividend by 15%.

It takes the total pay-out to Shell shareholders to 26 billion dollars (£22.4 billion) so far this year.

Mr van Beurden said: “We continue to strengthen Shell’s portfolio through disciplined investment and transform the company for a low-carbon future.

“At the same time we are working closely with governments and customers to address their short- and long-term energy needs.

“Today we are announcing a new share buyback programme resulting in an additional four billion dollars of distributions, which we expect to complete by our Q4 (fourth quarter) 2022 results announcement.”

Rishi Sunak is now facing calls to expand the windfall tax on fossil fuel giants after Shell doubled its profits as it benefits from soaring energy prices.

Conservative Party chairman Nadhim Zahawi said Mr Sunak and Chancellor Jeremy Hunt will consider the move ahead of the November 17 autumn budget.

Greenpeace on Thursday called for a “proper tax” on the energy giant’s profits, which it said could help insulate thousands of homes.

“While Shell continues to bank billions, how many more households need to be forced into fuel poverty before the government wakes up?

"The only way to address the interlocking cost of living, energy security and climate crises is a street-by-street rollout of home insulation combined with a massive lift in ambition for renewable energy,” the campaign group’s UK senior climate adviser, Charlie Kronick, said.

Liberal Democrat leader Sir Ed Davey said: “The Conservative government’s refusal to properly tax these eye-watering profits is an insult to families struggling to pay their energy bills.

“Even the CEO of Shell has admitted that oil and gas companies should be taxed more to help protect vulnerable households.”

It follows news that spot prices on gas briefly went negative earlier this week due to Europe stockpiling so much.

Officials have warned of an energy crisis that has been exacerbated by Russia slashing supplies in response to being hit by financial sanctions.

Now with EU gas storage facilities close to full, tankers are lining up at ports unable to unload their cargo leading prices to tumble.

Prices have turned negative due to an "oversupplied grid", Tomas Marzec-Manser, head of gas analytics at Independent Commodity Intelligence Services told CNN Business.

The numbers will come as a huge surprise for households and businesses who have been rocked by eye-watering prices that experts have suggested will only continue to rise.

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