…By Larry John for TDPel Media. Oil company Shell has exceeded experts’ profit expectations for the first quarter of 2023, with earnings of $9.6 billion (£7.6 billion), representing a 5.7% rise from the same period the previous year.
Shell noted a decline in prices for oil and gas sales as well as unfavourable tax movements, but managed to offset these by reducing operating expenses and achieving growth in chemicals and product trading.
Production also dipped slightly, to 2.9 million barrels of oil equivalent per day, with revenues increasing 3.3% to $87 billion (£69 billion).
Shell has announced plans to buy back shares worth $4 billion (£3.2 billion) over the next three months, with the overall distribution to shareholders for H1 2023 totalling $12 billion (£9.6 billion).
CEO Wael Sawan stated that Shell delivered strong results and operational performance during a period of volatility, adding that the buyback programme is in line with the company’s commitment to return attractive shareholder returns.
The release of Shell’s positive earnings results follows rival BP’s announcement of expectations-beating earnings earlier this week.
Activist group Global Witness called on the government to take a stronger stance against the oil majors, claiming that UK taxpayers are handing billions of pounds in extra tax rebates to oil and gas firms due to loopholes in the tax regime.
Analysis:
Shell’s higher-than-expected earnings for Q1 2023 demonstrate the continued profitability of the oil and gas industry, despite the ongoing push for climate action and the rise of renewable energy.
The fact that both Shell and BP have exceeded expectations in their earnings reports also suggests that the global demand for oil and gas remains high, despite efforts to transition towards more sustainable energy sources.
However, the earnings reports have also sparked renewed calls for stronger government action against oil and gas companies, particularly in light of the ongoing climate crisis.
Critics argue that the tax system currently in place in the UK allows for significant tax rebates for oil and gas firms, which is not sustainable in the long term.
The pressure on governments to take stronger action against the oil and gas industry is likely to continue, as the global movement towards more sustainable energy sources gains momentum.
Overall, the earnings reports from Shell and BP highlight the complex relationship between the oil and gas industry and the broader push for climate action.
While both companies have demonstrated their continued profitability, they are also facing increasing pressure to transition towards more sustainable business models and reduce their impact on the environment.
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