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Shell boss defends huge profits amid soaring energy bills

Shell chief executive Ben van Beurden.
Shell chief executive Ben van Beurden.

Shell supremo Ben van Beurden has claimed high oil and gas prices are not the only reason the company racked up record profits for a second consecutive quarter.

He said a “lot of hard work” had gone into making the Anglo-Dutch supermajor a “much more disciplined” and “resilient” business.

Shell’s chief executive added that was one reason takings are higher now than in 2013, when oil prices were also above $100 a barrel.

But Mr van Beurden did acknowledge Shell’s latest profits were “substantial” – and he said the company had a “responsibility” to help the UK’s energy security push.

Shell today posted posted bumper second quarter adjusted earnings of £9.43 billion – making it back-to-back record quarters for the energy giant. A stellar first quarter saw the energy producer record adjusted earnings of £7.5bn.

It comes as high oil and gas prices continue to hit consumers hard in the pocket.

UK households are facing record high energy prices this winter as gas supplies from Russia tighten.

Shell profits sign of ‘broken’ system

Shell’s numbers sparked fury from environmental groups, with some accusing the company of profiting from the invasion of Ukraine.

Friends of the Earth Scotland oil and gas campaigner Freya Aitchison said: “This announcement of yet another obscene profit for Shell is a clear sign that our broken energy system is completely unfit for purpose.

Ithaca Cambo
A “Stop Cambo” protest at the COP26 summit in Glasgow last year.

“Rising energy prices are a key driver of a cost-of-living crisis that has plunged millions of people in the UK into fuel poverty, yet bosses and shareholders at Shell are getting even richer by exploiting one of our most basic needs.

“Shell is also worsening climate breakdown and extreme weather by continuing to invest and lock us into new oil and gas projects for decades to come.”

Shell recently announced it is progressing with the Jackdaw gasfield in the UK North Sea.

shell jackdaw
Jackdaw will be tied back to the Shearwater gas hub.

High prices a global issue

Mr van Beurden described mounting energy prices as a “global phenomena”.

But there is “not much” the company “can do about it”, other than by being “very good at our operations” in order to increase supply, he said.

He added: “Our profits are very significant, I realise that. And our cash flows are also very significant. But, it is also a fact that we have been working for 10 years to turn this company into a much more disciplined company than it was in 2013, and into a much more resilient company.

“At the same time there is a responsibility with making money, and that is that we continue to invest in energy security – and we do – and in the energy transition.”

Good news for government coffers

The UK Government will be one of the beneficiaries of Shell’s mammoth profits, having introduced a windfall tax on the sector earlier this year.

Cash raised by the energy profits levy will go towards helping hard up households, but concerns have been raised it could put off investors and hamper efforts to increase the supply of oil and gas.

Meanwhile, Shell is increasing shareholder distributions through a £4.92bn “buyback” programme which is expected to be completed by the time of the firm’s Q3 2022 results.

Stuart Lamont, an investment manager in the Aberdeen office of wealth manager Brewin Dolphin said: “The strong oil price backdrop has helped Shell deliver a blockbuster set of results.

“The dividend may have remained the same but the share buyback programme is positive news for shareholders.”

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