In the first half of the year, the London-listed oil and gas corporation posted record earnings due to rising oil and gas prices.
Shell announced operational profits of $9.5bn (£8.19bn) for the third quarter of this year, which is lower than the previous quarter but still more than twice the same period in 2021.
Despite rising oil and gas prices, the London-listed energy giant recorded two consecutive quarters of record profits in the first half of the year.
The earnings are below expectations. It was anticipated that Shell will announce net earnings of $10.5bn in the third quarter, compared to $11.5bn in the second quarter.
Due to lower liquefied natural gas (LNG) trading, lower chemicals and refining margins, and higher underlying operating expenses, profits were lower compared to the second quarter.
The total amount paid to shareholders in the past quarter was $6.8 billion. The company distributed a dividend of $0.25 per share.
Shell, however, wants this amount to increase. Subject to board approval, the company intends to increase the dividend payment per share by 15% for the fourth quarter, which will be distributed in March of next year.
Following a $6bn round of share buybacks announced in the second quarter results statement, the company announced on Thursday that it will repurchase $4bn worth of shares from shareholders before the fourth quarter results are announced.
The profits are likely to increase calls for additional one-time windfall taxes, for which Shell CEO Ben van Beurden stated that the company is prepared and has been collaborating with the Treasury.
“We are engaged in an ongoing, constructive dialogue with the Treasury,” he said.
It is “society’s reality” that governments will intervene when “many people… especially the most vulnerable” struggle with the cost of living.
After announcing the results, he addressed the media and stated that the company should have a seat at the table to “help the government design the right rules.”
He stated that the corporation is prepared for windfall taxes and anticipates their implementation next year.
Liz Truss ruled out any additional windfall tax beyond the one enacted in May while she was prime minister. The May energy profits levy proposed by current Prime Minister Rishi Sunak when he was chancellor taxed profits at a rate of 25%.
Mr. van Beurden had previously urged the government to tax oil and gas firms to shield the poorest members of society from rising energy prices.
Ben van Beurden, speaking at the Energy Intelligence Forum in London, stated, “In some manner, government action must result in the protection of the poor.
This may therefore need that governments tax the people in this room to pay for it.
The government just stated that it will proceed with a windfall tax on the renewable energy industry, which has been reaping record profits due to rising gas costs.
Ed Miliband MP, Labour’s Shadow Climate Change and Net Zero Secretary commented on the earnings and called for a windfall tax.
“The fact that Shell generated the second biggest quarterly profits in the company’s history is more evidence that we need a meaningful windfall tax to ensure that energy firms pay their fair part,” he stated.
“Rishi Sunak’s current proposals are a poor replica of Labour’s windfall tax and will return billions of pounds of taxpayer money to oil and gas corporations through absurd tax loopholes.”
