Shell reveals annual profits tumbled in 2023 as it faced lower oil and gas prices

Underlying earnings fell 19 per cent to 68.5 billion US dollars (£54.1 billion), down 19 per cent from 84.3 billion US dollars (£66.6 billion) the previous year.

The lower profits come after oil prices fell last year after big increases in 2022 in the aftermath of Russia’s invasion of Ukraine, with oil trading at about 82 US dollars a barrel on average through last year, against 100 US dollars in 2022.

But Shell said it saw a 17 per cent quarter-on-quarter increase in underlying earnings, including taxes, to a better-than-expected 7.3 billion US dollars (£5.8 billion) in the final three months of 2023.

It also announced plans to deliver more returns for shareholders, with a 4 per cent rise in investor dividends.

Shares in the firm lifted 2 per cent in morning trading on Thursday.

Shell chief executive Wael Sawan said the group had “made good progress” over the year and it would focus on “more value with less emissions”.

Shell has come under heavy fire over the past year amid accusations it is prioritising shareholder returns over net zero goals.

Its green credentials were in focus again on Thursday as Greenpeace activists protested outside its London headquarters dressed as partying Shell board members.

Greenpeace campaigners said the oil group should pay some of its profits into a fund agreed at Cop28 climate talks last month to help pay for loss and damage caused by climate change.

In July last year, Shell abandoned one of its green pledges, which was to cut oil production by 1 per cent to 2 per cent each year until the end of the decade, saying it had already met the goal.

But this was largely as a result of it selling off some oil and gas fields, which meant the company’s production was already lower than it would have been in 2030 under the old plan.

The group said on Thursday it was “progressing towards its goal of achieving net-zero emissions by 2050” and would give an update on its energy transition strategy on March 14.

Mr Sawan said: “Shell delivered another quarter of strong performance, concluding a year in which we made good progress

He said: “As we enter 2024 we are continuing to simplify our organisation with a focus on delivering more value with less emissions.”

Shell and the wider oil and energy sector are also under pressure to pay more in windfall taxes as households have struggled amid high energy bills since Russia’s war with Ukraine.

The group results reflected the impact of hefty impairments on its bottom line after announcing earlier this month it was facing up to 4.5 billion US dollars (£3.6 billion) of charges for the final quarter of 2023.

Shell was also recently reported to have paused all shipments through the Red Sea due to Houthi attacks on vessels. Chief financial officer Sinead Gorman said the firm was making decisions over the route on an “hour by hour” basis, but that the safety of its workers and ships was of “paramount importance”.

She said alternative routes added 10 to 15 days on to journeys, but that Shell was less affected than many rivals.