LAHORE MIRROR (Monitoring Desk)– Oil giant Shell on Thursday reported its highest quarterly profit since 2008 on soaring commodity prices, fueling calls for a one-off windfall tax on oil and gas companies to help UK households with spiraling energy bills.
Shell posted adjusted earnings of $9.1 billion for the three months through to the end of March, in line with expectations of analysts polled by Refinitiv. That compared with $3.2 billion over the same period a year earlier and $6.4 billion for the fourth quarter of 2021.
Of the firm’s $8.5 billion share buyback program announced for the first half of the year, Shell said $4 billion had been completed to date. The remaining $4.5 billion share buybacks are scheduled to be completed before the announcement of second-quarter earnings.
Shares of the company rose 3% on Thursday morning.
Shell’s results echo bumper profits seen across the oil and gas industry, even as many energy majors incur costly write-downs from exiting Russia.
U.K. rival BP on Tuesday announced plans to boost share buybacks after first-quarter net profit jumped to its highest level in more than a decade. France’s TotalEnergies, Norway’s Equinor and U.S. oil giants Chevron and Exxon Mobil also reported strong first-quarter profits on soaring commodity prices.
“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,” CEO Ben van Beurden said in a statement.
“The impacts of this uncertainty and the higher cost that comes with it are being felt far and wide. We have been engaging with governments, our customers and suppliers to work through the challenging implications and provide support and solutions where we can.”
Shell reported a sharp upswing in full-year profit in 2021 on rebounding oil and gas prices.
‘Obscene’ profits
Union groups and environmental campaigners have labeled record profits for U.K. fossil fuel companies as “obscene” at a time when many consumers are grappling with surging energy costs.
Opposition lawmakers have repeatedly called on Prime Minister Boris Johnson’s government to impose higher taxes on oil and gas companies to help struggling families.
Finance Minister Rishi Sunak has suggested such a policy may be possible if oil and gas companies do not properly reinvest profits. Johnson, however, has rejected fresh calls for a windfall tax, saying it will discourage investment and keep oil prices high over the long term.
Meanwhile, the European Union on Wednesday said it plans to ban Russian oil imports within six months and refined products by the end of the year in its latest round of economic sanctions. The bloc’s proposed measures reflect the widespread anger at Russian President Vladimir Putin’s unprovoked onslaught in Ukraine.
Oil prices jumped on the news, adding to these gains on Thursday morning.
International benchmark Brent crude futures traded at $110.9 in London, up almost 0.7% for the session, while U.S. West Texas Intermediate futures stood at $108.4, roughly 0.5% higher.
SOURCE: CNBC
