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Shell and TotalEnergies Report Record Profits

Business

Shell Fuel Truck at Station | Image by Shuhtterstock

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Shell and TotalEnergies, two European oil giants, have gained profits to the tune of nearly $20 billion. Total, based in Paris, posted adjusted profits of $9.9 billion. At the same time, Shell, based in London, reported a profit of $9.45 billion, the second-highest ever recorded in the company’s history.

Both companies earned more than double their profits made in the same quarter of 2021.

Amid the war in Ukraine and Russia limiting gas flow, European nations have leaned on Shell, Total, and other energy companies to increase supply.

Shell and Total are both major companies in the production of liquified natural gas, of which demand has increased due to the effort to replace fossil fuels from Russia.

“We are delivering robust results at a time of ongoing volatility in global energy markets. 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,” said Ben van Beurden, Shell’s CEO, in a press release.

Shell has also avoided paying the U.K.’s windfall tax throughout 2022 because of huge capital expenditures on drilling more oil in the North Sea.

The company’s finance chief, Sinead Gorman explained, “We simply are investing more heavily than we have, and therefore we don’t have profits which we can be taxed against.”

As for Total, the company pointed out that downstream business has been very strong, benefitting from strong distillate margins and “generating an outstanding adjusted net operating income of $2.4 billion and a cash flow of $2.9 billion.”

Shell has announced that it will be returning a large amount of the profit to shareholders by increasing its fourth-quarter dividend for shareholders by 15%.

According to Beurden, “Today we are announcing a new share buyback programme resulting in an additional $4 billion of distributions, which we expect to complete by our Q4 2022 results announcement. Furthermore, we plan to increase the dividend per share (DPS) for the fourth quarter, which will be paid in March 2023, by an expected 15%, subject to Board approval.”

Total also announced that the dividend for the third quarter of 2022 saw an increase of 5% compared to the previous year. It additionally intends to give its employees across the world a bonus of one month’s salary.

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