Shell will stop buying Russian oil and gas 1:02
(CNN) --
Shell made a record profit of nearly $40 billion in 2022, more than double what it made the year before, thanks to soaring oil and gas prices from Russia's invasion of Ukraine.
Europe's largest oil company reported adjusted annual earnings of $39.9 billion on Thursday, more than double the $19.3 billion recorded in 2021. Those numbers were boosted by strong performance in its gas trading business.
Shares of the company rose 2.6% in London at midday.
Just over 40% of Shell's full-year profit came from its integrated gas business, which includes commercial liquefied natural gas operations.
The unit was responsible for nearly two-thirds of Shell's $9.8 billion profit in the last three months of the year.
Exxon shares rise for the first time since 2014
Shell CEO Wael Sawan said the results "demonstrate the strength of Shell's differentiated portfolio, as well as our ability to deliver vital energy to our customers in a volatile world."
These gains are the latest in a series of record results from the world's largest energy companies, which have made extraordinary profits thanks to rising oil and gas prices.
advertising
ExxonMobil this week posted record full-year profits of $59.1 billion.
Last month, Chevron reported a record annual profit of $36.5 billion.
Those numbers have led to new calls for higher taxes.
The governments of the European Union and the United Kingdom have already imposed extraordinary taxes on the profits of oil companies, using the profits to help households facing rising energy bills.
Shell said it expected to take an additional tax charge of $2.3 billion in 2022 related to the EU windfall tax and the UK energy profit tax.
The company paid $13.1 billion in taxes globally in 2022.
More for shareholders
Shell also announced another $4 billion share buyback program that it expects to complete in May and confirmed that it would increase its dividend per share by 15% for the fourth quarter.
The company returned $26 billion to shareholders in 2022 through share buybacks and dividend payments.
By comparison, it spent about $21 billion on its low- or zero-carbon businesses last year, or about a third of total spending, chief financial officer Sinead Gorman told reporters on a call Thursday.
Of that, about $4 billion was invested in its Renewables and Energy Solutions business, which includes electricity generation, hydrogen production, carbon capture and storage, and carbon credit trading.
The UN denounces deception by fossil fuel companies about their polluting emissions
The unit generated less than 5% of the group's profits in 2022, underscoring the magnitude of the challenge facing Shell as it seeks to move away from oil and gas towards lower carbon energy.
The company came under fire from climate activists on Thursday for not acting fast enough.
“Shell cannot claim to be in transition as investments in fossil fuels eclipse investments in renewables,” Mark van Baal, founder of shareholder activist group Follow This, said in a statement.
"Most of Shell's investments remain tied to the fossil fuel business because the company does not have a target to reduce its total CO2 emissions in this decade."
Shell invested about $12.4 billion in its integrated oil and gas exploration units in 2022.
Asked if Shell could invest more in renewable energy, Sawan said she believed the company was "finding the right balance in capital allocation."
A compressor station on the JAGAL pipeline, the German extension of the Yamal-Europe pipeline connecting Russia and Germany via Poland, pictured on April 28, 2022 after supplies were halted by Moscow.
(Credit: Sean Gallup/Getty Images)
He also said Shell was on track to cut emissions from its own operations in half by 2030, compared to 2016 levels. More than 90% of Shell's emissions come from customers' use of its products. .
The idea, he said, is to reduce these so-called "scope 3" emissions by 20% by 2030.
Shell plans to become a net zero emissions company by 2050.
Greenpeace activists are organizing a protest this week on a Shell-contracted ship in the Atlantic Ocean carrying equipment to rebuild the Penguins oil and gas field in the North Sea.
The environmental group said in a statement that the protest is aimed at "exposing the global climate devastation caused by Shell."
In a statement shared with CNN, a Shell spokesperson said the activists had boarded "a moving ship in difficult conditions" and are "raising real security concerns."
“Projects like Penguins... help reduce the UK's reliance on more expensive and carbon-intensive energy imports.
Responsible production of locally produced oil and gas is critical to UK energy security and is fully consistent with a path to net zero,” the spokesperson added.
fuelshell
