Oil and gas giant Shell has seen its profits plunge to $5.1 billion (£3.9 billion) in Q2 2023, just a year after experiencing profits of $11.5 billion (£8.9 billion) for the same period in 2022.
This also represents a drop in profits from Q1 2023 when it posted $9.6 billion (£7.5 billion).
According to oil and gas giant the profits, which cover a three-month period from April to the end of June, dropped because of the stabilisation of energy prices in comparison to the peak of the energy crisis. Shell also referenced lower volumes, lower LNG trading and optimisation results as other factors for the drop.
Shell confirmed it would continue its strategy and spend $3 billion (£2.3 billion) on buying back shares within the next three months, subject to board approval. It also intends to spend $2.5 billion (£1.9 billion) after its Q3 2023 results on the same cause.
Commenting on the financial results, Shell CEO Wael Sawan said: “Shell delivered strong operational performance and cash flows in the second quarter, despite a lower commodity price environment. Today we are delivering on our Capital Markets Day commitment of a 15% dividend increase.
“We are going further on our buyback guidance by commencing a $3 billion programme for the next three months and, subject to Board approval, at least $2.5 billion at the Q3 2023 results. As we deliver more value with less emissions, we will continue to prioritise share buybacks, given the value that our shares represent.”
Despite this decrease, Shell’s profits continue to soar amid the energy crisis and during a period of climate uncertainty with wildfires and boiling temperatures continue to plague much of southern Europe – something that has been attributed directly to the climate crisis.
Much like when Shell posted its “highest-ever” annual profits in 2022, which amounted to £32.2 billion, the firm’s Q2 results have sparked controversy from across the sector. This can be seen in climate organisation Greenpeace UK’s tweet below.
🚨 BREAKING: As wildfires tear through countries like Greece, oil giant Shell has just announced quarterly profits of £3.9 BILLION.
— Greenpeace UK (@GreenpeaceUK) July 27, 2023
Big Oil is profiting off the climate destruction we are seeing around us – so we sent them a message. pic.twitter.com/W2mkPLVe9m
Adding to this, Maja Darlington, campaigner at Greenpeace UK, said: “While millions attempt to rebuild their lives after months of extreme weather wreaked havoc from Rhodes to Rajasthan, Shell is upping oil and gas production, slashing investment in renewables and posting billions of dollars in profits. They’re partying like there’s no tomorrow and ordinary people around the world are being forced to pick up the tab.
“It is blazingly clear that global leadership is needed to end this fossil fuel free-for-all, but instead the UK government is flip-flopping on its climate commitments and further enriching the oil giants with new fossil fuel developments. It’s time for the government to find its backbone and force Shell and the rest of the industry to stop drilling and start paying for the damage they are already causing around the world.”
Dr George Dibb, head of the Centre for Economic Justice at IPPR, also argued that Shell is prioritising profits over battling the climate crisis.
“Shell has proven its commitment to putting profits and shareholders over our planet. It continues to make huge amounts of money off the back of the war in Ukraine and high energy prices,” Dibb said.
“Meanwhile, incredibly, Shell is now paying more out to its shareholders in dividends and buybacks than it makes in profit, clearly prioritising these transfers over investing a net zero future. If fossil fuel firms refuse to invest in decarbonisation then it’s right for the UK government, like the USA and Canada, to tax share buybacks to support greater public investment in the transition to net zero.”
