Bringing You the Daily Dispatch

Despite a 30% decrease in yearly profits, Shell plans to increase dividends once more.
Climate Environment World News

Despite a 30% decrease in yearly profits, Shell plans to increase dividends once more.

Shell’s shareholders can anticipate another year of increasing dividends following the company’s announcement of profits exceeding $28 billion (£22 billion) for 2023, making it one of their most successful years to date.

In 2022, Shell’s profits reached a record high of $40 billion during the global energy crisis. However, last year, their profits dropped by nearly a third to $28.3 billion due to a decrease in demand for oil and gas.

The company’s profits were the second highest in eight years, thanks to a strong final quarter. Shell exceeded expectations with adjusted earnings of $7.3 billion, surpassing the predicted amount of just over $6 billion.

The oil company distributed $23 billion to its shareholders in the previous year. It intends to increase its dividend by 4% and give back $3.5 billion to investors through share repurchases during the first quarter of 2024.

Shell’s chief executive, Wael Sawan, revealed the expectation-beating results as green activists staged a protest outside the company’s London headquarters. Greenpeace campaigners held a mock party dressed as Shell board members while holding a burning sign reading “Your Future”.

Sawan informed shareholders that the business was making progress in reducing costs, increasing dividends, and boosting oil and gas output. Environmental activists are upset with these plans and are urging the company to decrease its reliance on fossil fuels and allocate more profits towards environmentally friendly energy sources.

Shell invested $2.7bn in its low-carbon business last year, or just over 10% of its total investments, down from 14% of its total spending in 2022. Mark van Baal, the founder of green shareholder group Follow This, said: “The decreased investments in its clean energy division show that Shell is not serious about the energy transition. As long as investments in fossil fuels dwarf investments in renewables, Shell cannot claim to be in transition.”

Last year, Sawan took on the role of chief executive and has since changed course on a strategy to decrease Shell’s oil and gas production by 1-2% annually in order to increase profits. He stated that the company successfully increased production by 200,000 barrels of oil equivalent per day last year and plans to begin new projects in the fossil fuel industry that will add 500,000 barrels per day by 2025.

Shell’s recent announcement to invest in new oil and gas ventures has been justified by the company’s desire to maintain global energy security and financial stability in the future, according to their representative. However, this decision disregards the recommendations of climate scientists who have emphasized the urgency of halting any further development of fossil fuels in order to prevent a climate catastrophe.

Last year, Shell announced its intention to reduce its workforce in the low carbon division, with the goal of decreasing costs by $2-3 billion by 2025. Sawan confirmed that the company has already made $1 billion in structural cost cuts.

Ignore the advertisement for the newsletter

According to Sinead Gorman, the CFO of Shell, the company will continue to be cautious when it comes to investing in low-carbon initiatives and will only pursue opportunities that meet their shareholders’ expectations. The company will announce its plans for low-carbon spending in March, but there are no plans to establish new sustainability goals.

According to Sjoukje van Oosterhout, a researcher at Friends of the Earth in the Netherlands, Shell has once again prioritized shareholders over the environment.

According to Van Oosterhout, Wael Sawan (CEO of Shell) continues to delay sustainable investments and instead, is initiating large-scale fossil fuel projects in places like Brazil and the Gulf of Mexico. Despite the urgency of the situation, Shell remains unwilling to alter its course and is rapidly heading towards the destruction of the planet.

Source: theguardian.com