BP hopes to avoid Shell’s expectation miss as it reports profits

Shell reported a 5.1 billion dollar profit (£3.9bn) in adjusted earnings, showing that its finances are returning closer to pre-energy crisis times.

But that was half a billion pounds lower than the 5.6 billion dollars (£4.3bn) that the company’s analysts had expected it to make.

Analysts already expect BP to make less money, about 3.5 billion dollars (£2.7bn) in underlying replacement cost profit, but investors might hope that it will not miss those expectations.

Shell said that its profit had reduced due to it receiving lower prices for the oil and gas that it sells.

The business also reported lower margins at its refining unit, sold less liquid natural gas than the quarter before – LNG is generally more popular when it is winter in the northern hemisphere – and its LNG trading business also fared worse.

The fates of both companies often track each other closely. In May both companies reported expectation-beating profits, Shell by £1.4bn and BP by about half a billion pounds.

Then, as now, their profits sparked calls for more to be done to ensure that the windfall from higher energy prices that were sparked by Russia’s full-scale attack on Ukraine does not benefit oil companies while ordinary people suffer.

Labour and the Liberal Democrats on Thursday called for changes to the windfall tax after Shell and British Gas owner Centrica announced their results.

“These figures demonstrate the continuing scandal of the Tory failure to act on the windfalls of war being pocketed by oil and gas companies,” said Ed Miliband, Labour’s shadow climate and net zero secretary.

Labour, he said, would introduce a “proper windfall tax” on oil companies and promote cheap renewables to bring down bills for households.

The Liberal Democrat leader Sir Ed Davey called for a general election in his response to the companies’ profits.

“It beggars belief that after all these months this Conservative Government is still allowing energy firms to rake in extraordinary profits while millions of families struggle,” Sir Ed said.

He added: “It’s time for a general election and a proper windfall tax to fund the support families desperately need.”

It was also revealed last week that British Gas made a record £1bn in the first six months of the year, helping its parent company Centrica make £2.1bn in adjusted operating profit, up 55 per cent on the year before.

Speaking last week, Unite general secretary Sharon Graham said: “British Gas’ owner Centrica has just reported its highest ever first half year profits, raking in almost £1bn. We need to stop dancing around our handbags and grasp the nettle. The only way to end the chaos in our energy supply is staring us in the face – public ownership."