Ben van Beurden has claimed high oil and gas prices aren’t the sole reason for Shell (LON: SHEL) posting record for profits for the second quarter in a row.
Over the last decade, a “lot of hard work” has gone on in order to make the Anglo-Dutch supermajor a “much more disciplined” and “resilient” business.
And the Shell chief executive says that is one reason takings are higher now than they were in 2013, when the oil price was also above $100 a barrel.
Mr van Beurden did however acknowledge that Shell’s profits are “substantial” and that it has a “responsibility” to help the UK’s energy security push.
In its first half 2022 results, published on Thursday, Shell reported adjusted earnings of $11.5 billion, making it back-to-back record quarters for the oil giant.
Hours earlier it was reported that UK households are staring down the barrel of record high energy prices this winter, as gas supplies from Russia tighten.
Shell profits a sign of ‘broken’ system
It sparked fury from environmental groups, with some accusing the company of profiting from the invasion of Ukraine.
Friends of the Earth Scotland’s oil and gas campaigner Freya Aitchison said: “This announcement of yet another obscene profit for Shell is a clear sign that our broken energy system is completely unfit for purpose.
© Colin Hattersley“Rising energy prices are a key driver of the cost of living crisis that has plunged millions of people in the UK into fuel poverty, yet bosses and shareholders at Shell are getting even richer by exploiting one of our most basic needs.”
“Shell is also worsening climate breakdown and extreme weather by continuing to invest and lock us into new oil and gas projects for decades to come. We must phase out fossil fuels and speed up the transition to renewables in order to overhaul our energy system and ensure that everyone has access to affordable and clean renewable energy.”
High prices a global issue
Speaking following the publication of Shell’s results, Mr van Beurden described mounting energy prices as a “global phenomena”.
He claimed there is “not much” the company “can do about it”, other than by being “very good at our operations” in order to increase supply.
Shell recently announced it would be progressing with the Jackdaw gas field in the North Sea after approving investment.
© Simon PriceMr van Beurden added: “Our profits are very significant, I realise that. And our cash flows are also very significant. But, it is also a fact that we have been working for 10 years to turn this company into a much more disciplined company than it was in 2013, and into a much more resilient company. On so many fronts, we are just a much more high quality entity.
“Then of course, when oil prices got back to where they were in 2013, you see a better result. I’m not denying that result is driven by oil prices reverting to what they were, but the improvement is actually on the back of a lot of hard work and a lot of high grading.
“At the same time, there is a responsibility with making money, and that is that we continue to invest in energy security, and we do, and in the energy transition.”
Good news for government coffers
UK Government will be one of the beneficiaries of Shell’s mammoth profits, having introduced a windfall tax on the sector earlier this year.
Cash raised by the energy profits levy will go towards helping hard up households, but concerns have been raised it could put off investors and hamper efforts to increase the supply of oil and gas.
Mr van Beurden added: “I’ve been on the record saying that if a windfall tax is implemented, as it has been in the UK, then there are other ways of doing it, which is to make sure companies like us are incentivised to invest even more in the energy transition. For instance, by allowances for energy transition investments.”
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