Energy giant Shell’s annual profits surge to £32BN in wake of Russia’s invasion of Ukraine

Energy giant Shell’s profits increased to £32 billion ($39.9bn) in 2022 due to soaring oil prices in the wake of Russia’s invasion of Ukraine. 

The figure presented the company’s highest profit in its 115-year history and surpassed the expectations of industry experts. 

It comes amid continued questions over the scale of windfall taxes on energy producers, which have benefited from higher prices. 

The London-listed oil major told investors that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) leapt 53 per cent against the previous year, after energy prices were catapulted higher following the Russian invasion of Ukraine.

Adjusted earnings, including taxes, more than doubled to $39.9 billion (£32.2 billion).

As Shell announced its results, Greenpeace activists set up a huge, mock petrol station price board outside the company’s London HQ. The 10ft board displays the £32.2bn Shell has made in profits in 2022, with a question mark next to the amount it will pay towards climate loss and damage. 

Shell’s profits increased to £32 billion ($39.9bn) in 2022 due to soaring oil prices in the wake of Russia’s invasion of Ukraine (stock photo)

Campaigners from Greenpeace said Shell is ‘profiteering from climate destruction’ after the record profit haul.

‘While Shell counts their record-breaking billions, people across the globe count the damage from the record-breaking droughts, heatwaves and floods this oil giant is fuelling,’ Greenpeace senior climate justice campaigner Elena Polisano said.

The figures are part of a debut set of results for Wael Sawan, who took over as chief executive at the start of the year. 

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.

‘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 per cent dividend increase and the four-billion-dollar share buyback programme announced today.’

Earlier this week, the new chief said it would combine its oil and gas production and liquified natural gas (LNG) divisions as part of an overhaul which will also cut the number of executive roles at the company. 

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.

Greenpeace activists set up a huge, mock petrol station price board outside the company’s London HQ

‘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.’

Shell said it paid £1.5 billion ($1.9bn) in windfall tax charges to the UK and EU.

Bumper profits by energy producers in 2022 prompted the government to launch a windfall tax, called the Energy Profits Levy, which was then toughened by Chancellor Jeremy Hunt.

Shell has pledged to be a net zero carbon company by 2050 and has said its overall carbon emissions peaked in 2018 at around 1.7 billion tonnes. 

Its rival BP said on Monday while a worldwide transition away from fossil fuels could be accelerated by the Ukraine-Russia war, it added in a report that ‘oil continues to play a major role in the global energy system for the next 15-20 years’.

The invasion a year ago of Ukraine by its neighbour Russia sent oil and gas prices rocketing.

Russia is a major producer of fossil fuels and the war resulted in slashed supplies.