Shell posted an adjusted profit of $9.1 billion for the first quarter of 2022.
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LONDON – Oil giant Shell on Thursday reported its highest quarterly profit since 2008 on rising commodity prices, fueling calls for a one-time windfall tax on oil and gas companies to help UK households with rising energy bills.
Shell posted an adjusted profit of $9.1 billion for the three months to the end of March, in line with analyst expectations polled by Refinitiv. That was $3.2 billion in the same period a year earlier and $6.4 billion in the fourth quarter of 2021.
The company also announced plans to increase its first quarter dividend by about 4% to $0.25 per share.
Of the $8.5 billion share repurchase program the company announced for the first half of the year, $4 billion has been completed to date. The remaining $4.5 billion of its share repurchase is expected to be completed before the announcement of its second quarter results.
Shell’s results reflect the huge gains seen in the oil and gas industry, even as many major energy companies incur expensive write-offs when they leave Russia.
British rival BP announced plans on Tuesday to boost share buybacks after net profit rose to its highest level in more than a decade in the first quarter. France’s TotalEnergies, Norway’s Equinor and US oil giants Chevron and Exxon Mobil also reported strong first-quarter gains on rising commodity prices.
Shell confirmed it had taken $3.9 billion in after-tax expenses in the first quarter as a result of its exit from Russia. The company had previously warned it could write off between $4 billion and $5 billion in value from its assets after it pulled out of the country. The company said these charges are not expected to affect adjusted earnings.
“The war in Ukraine is primarily a human tragedy, but it has also caused significant disruption to global energy markets and demonstrated that safe, reliable and affordable energy cannot be taken for granted,” CEO Ben van Beurden said in a statement. †
“The effects of this uncertainty and the increased costs associated with it are being felt far and wide. We have consulted with governments, our customers and suppliers to process the challenging implications and provide support and solutions where possible.”
Shell reported a strong rebound in full-year profits in 2021 as oil and gas prices pick up.
The company’s shares are up more than 36% since the beginning of the year.
Unions and environmentalists have labeled record profits for UK fossil fuel companies as “obscene” at a time when many consumers are grappling with rising energy costs.
Opposition lawmakers have repeatedly called on Prime Minister Boris Johnson’s government to raise taxes on oil and gas companies to help troubled families.
Finance Minister Rishi Sunak has suggested that such a policy is possible if oil and gas companies do not reinvest their profits properly. However, Johnson has rejected new calls for a windfall tax, saying it will discourage investment and keep oil prices high in the long run.
Meanwhile, the European Union said on Wednesday it plans to ban Russian oil imports within six months and refined products by the end of the year in its latest round of economic sanctions. The bloc’s proposed measures reflect widespread anger over Russian President Vladimir Putin’s unprovoked attack in Ukraine.
Oil prices rocketed on the news and contributed to this gain on Thursday morning.
International benchmark Brent crude futures traded at $110.9 in London, up nearly 0.7% for the session, while US West Texas Intermediate futures were at $108.4, up about 0.5%.