‘Awash with cash’: Fresh calls for windfall tax as oil and gas price surge boosts Shell profits

Annual profits at energy giant Shell have surged to $17bn as it was boosted by higher oil and gas prices.

The current cost of supplies (CCS) earnings figure compared with a $19.9bn loss a year ago and Shell said it now plans to reward investors with an $8.5bn share buyback programme and 4% hike in dividends for the current quarter.

Chief executive Ben van Beurden said it had been a “momentous year” for Shell, with the company also shedding its Anglo-Dutch dual corporate structure and relocating its tax residence from the Netherlands to the UK.

Image: Chief executive Ben van Beurden said it had been a ‘momentous year’

But the figures prompted Labour to reiterate its call for a windfall tax on North Sea energy firms to support hard-pressed consumers struggling with their bills.

Stripping out one-off costs, Shell’s CCS earnings were $19.3bn for the year, up from $4.8bn in 2020.


For the fourth quarter, earnings were $11.1bn compared to a loss of $4.5bn a year earlier, or $6.4bn on an underlying basis, up from $393m in the last three months of 2020.

It comes at a time when prices on wholesale markets are running at about four times the level of a year ago – with the spike pushing up household energy bills as well as squeezing many small energy suppliers out of business.

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Shell was able to earn $8.88 for every thousand cubic feet of gas sold in the fourth quarter, up from $4.31 just six months earlier.

Demand for oil has also bounced back after a slump during the pandemic, with a barrel of Brent crude currently costing around $90 – about 50% higher than this time last year and having fallen below $20 early in 2020.

Image: Oil prices have bounced back

That has pushed fuel pump prices in the UK up to record levels.

Mr van Beurden said: “We delivered very strong financial performance in 2021, and our financial strength and discipline underpin the transformation of our company.”

Richard Hunter, head of markets at Interactive Investor, said: “Following the pandemic squalls which decimated the oil price and indeed profits, Shell has returned to form as it finds itself awash with cash.”

Ed Miliband, shadow secretary of state for climate and net zero, said: “With oil and gas profits booming in recent months because of the spike in energy prices, it is clearer than ever that the North Sea oil and gas producers who have made a fortune recently should be asked to contribute.

“Our plan, part paid for with a one-off windfall tax on North Sea oil and gas profits, would save most households £200 off their bills, with targeted support of up to £400 on top of that to the squeezed middle, pensioners and the lowest earners.”