In 2022, oil majors including TotalEnergies, ExxonMobil, Chevron, BP and Shell smashed their profits from the previous year.
The first-quarter 2023 financial report from British oil giant Shell (LON: SHEL) beat expectations, beating analysts’ expectations. In Shell’s latest report announce Adjusted earnings of $9.6 billion for the first three months of the year. Performance continues to achieve its current bumper results after commodity prices increased in 2022 due to Russia’s all-out invasion of Ukraine. According to Refinitiv, analysts expect Shell to report $8.6 billion in profits in the first quarter of 2023. Shell kicked off bumper results in the first quarter of 2022 after announcing adjusted earnings of $9.1 billion and completed 2022 with a profit of $9.8 billion in the fourth quarter.
Shell records its profits in the first quarter of 2023
After announcing the financial results for the first quarter of 2023, Shell shares rose 2.2% during mid-morning trading. Interestingly, Shell managed to keep its share repurchase program steady at $4 billion over the three months and kept its dividend at a constant rate of $0.2875 per share. According to senior Shell officials, the company’s quarterly reports reflected improved operational performance and lower cost of day-to-day business. Further explanations show that the results of fuel trading and optimization are inconsistent with lower oil and gas prices. The British oil giant reported net debt of $44.2 billion, a significant drop compared to $48.5 billion in 2022.
Speaking about the reports for the first quarter of 2023, Wael Sawan, CEO of Shell plc, said that the company “achieved strong results and strong operating performance, on the back of continued volatility, while continuing to provide vital supplies of safe energy.”
Shell’s first quarter report affected the shares of its direct competitor BP PLC. Although BP PLC’s strong oil and gas trading performance in the first quarter of 2023 beat analysts’ expectations, shares fell after it planned to scale back share buybacks.
Shell joins other oil majors in a winning streak
In 2022, oil majors including TotalEnergies (EPA: TTE), ExxonMobil (NYSE: XON), Chevron (NYSE: CVX), BP (LON: BP), and Shell smashed their profits from the previous year. Volatile oil and gas prices in the aftermath of the Russian invasion of Ukraine caused financial results to rise.
At the time, Shell posted adjusted earnings of $39.9 billion, beating its annual record of $28.4 billion in 2008. The 2022 annual report was twice the company’s full-year 2021 earnings of $19.29 billion.
Many have criticized these major oil companies for their bumper profits amid the current chaos between Russia and Ukraine. Senior executives defended their gains by enumerating the importance of switching off fossil fuels. They pointed out that increasing taxes on such investments would ease more deposits. Shell aims to become a carbon-neutral company by 2050, noting that adjusted first-quarter earnings for its renewable energy solutions unit rose to $389 million, compared to $293 million in 2022.
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