Shell has unveiled a $7.7bn (£6.2bn) profit driven almost entirely by its oil and gas operations as the business prepares for a showdown with green activists.
The company earned $7.5bn from oil, gas and petrochemicals in the first three months of the year, compared with just $163m from renewables.
It also said its products generated 517m tonnes of CO2 in 2023 – far more than the entire UK economy.
The results were released as Shell braces for a turbulent annual meeting next month, with green activists expected to demand a host of changes by the company.
The overall financial results are stronger than expected – analysts had predicted total earnings of around $6.5bn because of falling European gas prices. The company earned $9.6bn a year earlier.
Today’s announcement also includes another $3.5bn of share buybacks by August in a boost for shareholders.
However, the business is likely to face a backlash from activist investors, who are said to hold up to 5pc of the company’s shares, and are concerned about a decision to reverse its pledges to cut oil production and move towards greener energy.
They point out that even Shell’s oil and gas marketing budget is bigger than its spend on renewables.
George Dibb, of the Institute for Public Policy Research, a progressive think tank, said: “For every £1 Shell spent on renewables in the last quarter, they spent £11 transferring excess cash to shareholders.”
One group, led by Follow This, has put forward a resolution for Shell’s meeting on May 21 urging it to align all its medium-term emissions reduction targets with the Paris Agreement on keeping global temperature rises below 1.5C.
The resolution, backed by investors including Amundi, Axa IM and Scottish Widows, would make it hard for Shell to expand fossil fuel production.
Sinead Gorman, Shell’s chief financial officer, said Shell already planned to cut the emissions released by consumption of Shell’s oil and gas from 517m tonnes of CO2 last year to 483m tonnes or less by 2030. However this would still be about 150m tonnes more than the UK’s entire current emissions.
Gorman asked other investors to vote against the resolution.
She said: “We ask our shareholders to vote against… By doing so, our shareholders will be endorsing this management team, our Board and Shell’s aim of being THE investment case through the energy transition.”
More than half the latest earnings – around $3.7bn – came from Shell’s integrated gas operations, with another $1.9bn from upstream oil and gas production and $1.6bn from chemicals and products. Renewables and other low-carbon operations, by contrast, delivered just $163m.
Wael Sawan, chief executive, said: “Shell delivered another quarter of strong operational and financial performance, demonstrating our continued focus on delivering more value with less emissions.”
Mr Sawan took over the company in January 2023 and said last summer that he planned to refocus the business on oil and gas in an effort to win over investors.
He dropped a pledge to cut oil production each year for the rest of the decade, and said Shell would instead increase output – a move that will add to the pressure from environmentalists.
Projects which came onstream in 2023 will, at their peak, add over 200,000 barrels of oil equivalent a day. Along with other projects they will eventually add more than half a million barrels of oil equivalent a day to Shell’s production.
Alexander Kirk, fossil fuel campaigner at Global Witness, said Shell’s profits came at the expense of damage to the planet.
He said: “Shell continuing to rake in huge sums of money shows us that huge polluter profits were not a one-off but are the twisted reality of an energy system that benefits climate-wrecking companies to the cost of everyone else.”
Shares rose 1.1pc in early trading.
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