Shell profit up as high oil prices offset Russia hit

By: News Desk
Published: 12:49 PM, 5 May, 2022
Shell profit up as high oil prices offset Russia hit
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British energy giant Shell on Thursday said its net profit jumped 26 percent in the first quarter as soaring oil prices offset a sizeable charge linked to its Russia exit.

Profit after tax leapt to $7.1 billion (6.7 billion euros) compared with a year earlier, Shell said in a statement.

While the group took a $3.9-billion charge on its exit from Russia after Moscow invaded Ukraine, it saw lower costs elsewhere.

Underlying earnings spiked almost three-fold to a quarterly record of $9.1 billion, sparking fresh calls in Britain for a windfall tax on energy majors.

UK consumers are enduring a cost-of-living crisis caused by the highest rate of inflation in decades, also as economies reopen from pandemic lockdowns.

Prime Minister Boris Johnson, who faces a key mid-term test in local elections Thursday, has dismissed calls for a windfall levy on oil giants, arguing it would slow their efforts to invest in cleaner energy.

Shell on Thursday added that its revenue rallied 51 percent to $84.2 billion in the first three months of the year.

Oil prices have surged in recent months on concerns over tight supplies following the invasion of Ukraine by major oil and gas producer Russia.

- 'Human tragedy' -

"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," noted chief executive Ben van Beurden.

"The impacts of this uncertainty and the higher cost that comes with it are being felt far and wide."

The London-listed group last month flagged that it would take a hit of between $4 billion and $5 billion in the first quarter as a result of impairment from assets and additional charges relating to its Russian activities.

Shell announced in late February that it would sell its stakes in all joint ventures with Russian state energy giant Gazprom after the Kremlin launched its assault on Ukraine.

The company then decided in March to withdraw from Russian gas and oil in line with UK government policy.

Shell's British rival BP on Tuesday booked its biggest-ever quarterly loss, at $20.4 billion.

This after BP booked a mammoth $25.5 billion charge on its Russian withdrawal.

Shell added on Thursday that it has begun the second tranche of its $8.5-billion share buyback programme that was unveiled in February.

The group's share price rallied 3.0 percent to £22.90 in opening deals on London's rising stock market.