Investors of Shell can anticipate another year of increasing dividends following the company’s announcement of profits surpassing $28 billion (£22 billion) for 2023, making it one of their most profitable years to date.
In 2022, during the global energy crisis, Shell’s profits reached a record high of $40 billion. However, last year, due to a decline in oil and gas markets, their profits dropped by almost a third to $28.3 billion.
However, despite a strong final quarter with adjusted earnings of $7.3bn, exceeding the forecasted amount of just over $6bn, the company’s earnings were still the second highest reported since 2011.
The oil company distributed $23 billion to its shareholders in the previous year. They are now planning to increase their dividend by 4% and give back $3.5 billion to investors through share repurchases during the first quarter of 2024.
The CEO of Shell, Wael Sawan, announced better-than-expected results while environmental activists protested outside the company’s headquarters in London. Members of Greenpeace dressed up as Shell board members and held a burning sign that said “Your Future”.
Sawan informed investors that the company was making progress in reducing costs, increasing dividends, and boosting oil and gas production. These plans have sparked backlash from environmental advocates, who are urging the company to decrease its production of fossil fuels and allocate more profits towards renewable energy sources.
Last year, Shell committed $2.7 billion to its low-carbon sector, which accounted for about 10% of its overall investments. This is a decrease from the previous year, where low-carbon investments made up 14% of the total spending. Mark van Baal, the creator of environmentally-friendly shareholder group Follow This, stated that Shell’s reduced investments in clean energy indicate a lack of dedication to transitioning to sustainable energy. As long as the company continues to allocate more funds towards fossil fuels than renewables, it cannot be considered a leader in the energy transition.
Sawan, who became chief executive early last year, has also reversed a plan to reduce Shell’s oil and gas production by 1-2% a year in pursuit of higher profits. He said the company added 200,000 barrels of oil equivalent a day to its production last year and by 2025 would start enough new fossil fuel projects to add half a million barrels a day.
According to the speaker, the latest oil and gas initiatives would allow Shell to maintain a stable energy supply for the world and generate long-term cashflow. This decision goes against the recommendations of climate specialists who have stated that any further development of fossil fuels would worsen the ongoing climate crisis.
Last year, Shell announced its intention to reduce its workforce in the low carbon sector in order to achieve cost savings of $2-$3 billion by 2025. According to Sawan, the company has already decreased its structural expenses by $1 billion.
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Shell’s CFO, Sinead Gorman, stated that the company will continue to be “disciplined” in its investments for low-carbon initiatives and will decline opportunities that do not meet shareholder expectations. The company is planning to reveal its low-carbon spending priorities in March, but will not be setting any new green targets.
According to Sjoukje van Oosterhout, a Friends of the Earth researcher in the Netherlands, Shell has once again prioritized shareholders over the climate.
According to Van Oosterhout, Wael Sawan, the CEO of Shell, continues to prioritize traditional investments and has recently started new fossil fuel projects in Brazil and the Gulf of Mexico. Despite the urgency of the situation, Shell remains resistant to changing their approach and is recklessly contributing to the destruction of the planet.
Source: theguardian.com
