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Shell delivers record $40bn annual profit as energy prices soar

A view shows a logo of Shell petrol station in South East London, Britain, February 2, 2023. REUTERS/May James
Shell's bumper profits have sparked a call for oil majors to give back more through windfall taxes. REUTERS/May James (May James / reuters)

Shell (SHEL.L) has delivered a record $39.9bn (£32.2bn) profit last year fuelled by surging oil and gas prices, the highest in its 115-year history.

The London-listed company also posted record fourth-quarter earnings of £7.9bn ($9.8bn).

The figure is one of the highest profits ever posted by a British company after Vodafone's £60bn in 2014 – following the sale of Verizon Wireless – and British American Tobacco's £38bn in 2017.

Shell chief executive Wael Sawan said: “Our results in Q4 and across the full year demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world.

“We believe that Shell is well positioned to be the trusted partner through the energy transition.


Read more: Shell to pay £1.7bn in UK and EU windfall taxes

“As we continue to put our Powering Progress strategy into action, we will build on our core strengths, further simplify the organisation and focus on performance.

“We intend to remain disciplined while delivering compelling shareholder returns, as demonstrated by the 15% dividend increase and the four-billion-dollar share buyback programme announced today.”

Major oil firms have been reaping record profits after a surge in energy prices following Russia's invasion of Ukraine.

The profits have brought pressure on oil companies to pay windfall taxes as households struggle with inflation.

Stuart Lamont, investment manager at RBC Brewin Dolphin, said: “Shell’s record profit for the year will only intensify calls for more to be done to claw back profits from energy companies in the current environment. Looking ahead, investors will want a sense of what the future strategic direction of the company will be under the new CEO.”

In response to energy giant Shell’s record profits, the Liberal Democrats said prime minister Rishi Sunak has failed to take action with a proper windfall tax.

Lib Dem leader Sir Ed Davey said: “No company should be making these kind of outrageous profits out of Putin’s illegal invasion of Ukraine.

“Rishi Sunak was warned as chancellor and now as Prime Minister that we need a proper windfall tax on companies like Shell and he has failed to take action.

Read more: Shell's new CEO: Who is Wael Sawan?

“Families across the country are struggling to heat their homes and feed their families and this Government turns round and says ‘there is nothing we can do’.

“They must tax the oil and gas companies properly and at the very least ensure that energy bills don’t rise yet again in April.”

The head of the TUC has described Shell’s $40bn of profits as “obscene” and “an insult to working families”.

TUC general secretary Paul Nowak said the government must beef up its windfall tax, so that energy firms pay their fair share.

“As households up and down Britain struggle to pay their bills and make ends meet, Shell are enjoying a cash bonanza.“The time for excuses is over. The government must impose a larger windfall tax on energy companies. Billions are being left on the table," he said.

“Instead of holding down the pay of paramedics, teachers, firefighters and millions of other hard-pressed public servants, ministers should be making Big Oil and Gas pay their fair share.“There is nothing stopping Rishi Sunak and Jeremy Hunt from making that political choice," he added.

Activists from Greenpeace have begun a protest over Shell's record profits. They have set up a mock-petrol station price board displaying the Shell's net profit for 2022 outside the company's headquarters in London.

The group accused the company of "profiteering from climate destruction and immense human suffering".

Watch: Shell to review £25bn investment in UK projects after windfall tax extended

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