Shell’s first-quarter earnings almost tripled to hit a record as the company benefited from soaring oil and gas prices inflated by the war in Ukraine.
Adjusted earnings for the three months to the end of March rose to $9.13bn from $3.23bn a year earlier. Earnings increased 43% compared with the fourth quarter of 2021.
Earnings beat analysts average forecast for profit of $8.67bn. Shell increased its first-quarter dividend by 4% to 25 cents a share.
Shell’s results followed BP’s highest quarterly earnings for more than a decade. The bumper profits are likely to fuel political pressure for a windfall tax on oil companies’ profits amid a cost of living crisis in the UK caused partly by soaring energy prices.
The UK’s opposition Labour party has called for the levy but the government has resisted so far, arguing that a one-off tax would affect investment in green energy and companies’ view of the UK as a place to do business.
Shell Chief Executive Ben van Beurden attempted to head off criticism, arguing that strong earnings support energy security and the transition to more sustainable energy.
He said: “The war in Ukraine is first and foremost a human tragedy, but it has also caused significant disruption to global energy markets and has shown that secure, reliable and affordable energy simply cannot be taken for granted. The impacts of this uncertainty and the higher cost that comes with it are being felt far and wide. We have been engaging with governments, our customers and suppliers to work through the challenging implications and provide support and solutions where we can.
Higher prices boosted profit at Shell’s upstream division, which searches for and extracts oil and gas. Adjusted earnings rose to $3.45bn from $933m a year earlier and 22% compared with the fourth quarter of 2021. Integrated gas earnings rose to $4.09bn from $1.57bn a year earlier and were up 1% from the fourth quarter of 2021.
Van Beurden added: “Generating value through strong earnings and cash flow, coupled with maintaining a healthy balance sheet and continuing the disciplined delivery of our strategy, are crucial for Shell to play a leading role in the energy transition. This allows us to support our customers as they shift to cleaner energy. It’s also the best way for us to contribute to the security of energy supplies.”
