High energy prices give Shell mega profit | Economy

Shell has completely recovered from the corona crisis. The oil and gas group made a profit of 18 billion euros in 2021. A year earlier it suffered a loss of around 20 billion euros.

The cause of this huge turnaround is simple: Shell took full advantage of the higher oil and gas prices. The latter fuel in particular plays a major role, because Shell is slowly turning away from oil and investing more in gas and sustainable energy such as wind and solar energy.

Oil production already fell by 8 percent between 2019 and 2021. “That will fall by one to two percent per year over the next ten years,” said Shell CEO Ben van Beurden in an explanation of the annual figures. Part of that reduction comes from the sale of oil fields. The oil is then no longer pumped by Shell, but by someone else.

Big profit maker

The gas division, which also still includes renewable energy, was the major profit-maker last year. Shell was left with no less than 8.8 billion dollars from gas sales. This also includes sales of liquefied gas, lng.

Van Beurden attributes the high prices to the rapidly increasing demand for gas. Especially now that countries have stopped using coal as fuel for power plants. Investment in new oil and gas fields has actually lagged behind in recent years. Oil companies spent more on renewable energy sources.

High energy prices have become a political item. The discussion flares up left and right as to whether the large profits that oil companies now make should not be taxed extra. With that money, the energy bill of households can be reduced.

no charity

Van Beurden is not in favor of this. That does not make the desire to supply energy any greater, he warned. And Shell is not responsible for the high prices. “We only supply 1 to 1.5 percent of the world’s energy, we don’t set the price.”

Van Beurden pointed out that Shell has started to supply extra energy to Europe in the past year. “We just sent more tankers with LNG to Europe.” That was not charity, by the way. Europe simply pays the best prices. ,,But we are so flexible that we can also supply that extra gas”, says Van Beurden.

Shell had good news for shareholders. The company is increasing its dividend and plans to buy back $8.5 billion in its own shares this year. The profit then has to be spread over fewer shares, which results in a higher price.

Gas prices are going through the roof. Many people worldwide want gas, but there is very little available. So a gas shortage. Is there a chance that you will run out of gas this winter? Energy economist Daan Hulshof (University of Groningen) explains:

High energy prices give Shell mega profit | Economy
Source link High energy prices give Shell mega profit | Economy

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