Shell’s Profit Jumps, as Prices for Oil and Gas Rise

At the same time, Shell offered further signs that oil would play a diminishing role in the company’s future. Oil production has declined by 8 percent since 2019, the company said, and was expected to fall by up to 2 percent a year during this decade.

Shell said that trading in liquefied natural gas was a key contributor to the higher earnings along with higher oil and gas prices. The company has a large fleet of liquefied natural gas tankers that it can direct to the regions where it will receive the highest prices.

The fuel price boom, while beneficial to Shell and its shareholders, is of course concerning to consumers and governments, especially in Europe, where utility bills have risen sharply and gasoline prices have hit record highs. In Britain, there have been calls from politicians and environmental groups for windfall taxes to be imposed on the profits of gas producers.

On a call with reporters after the earnings announcement, Ben van Beurden, Shell’s chief executive, said that demand for oil and gas, in particular, had boomed in Asia, where China is switching to reduce coal consumption, while companies have restrained investment during the pandemic and focused investment on what he called the energy systems of the future.

“We are struggling as an industry to keep up with supply,” he said.

He said that Shell was diverting cargoes of liquefied natural gas to Europe, and that the company’s retail utility business in Britain was taking some of the customers of other suppliers that had not been able to deal with “the outrageous volatility” and had collapsed.

Article source: https://www.nytimes.com/2022/02/03/business/shell-4q-earnings.html