Oil and gas giant Shell has reported lower annual profits due to energy prices falling last year.
Profits were $28.2bn (£22.3bn) in 2023, down from $39.9bn in 2022 which was the company's highest earnings in its 115-year history.
Energy firms made record earnings when oil and gas prices soared in the aftermath of Russia's invasion of Ukraine amid fears of supply problems.
Households bills have eased since 2022, but remain at a high level.
Shell said its profit figure for last year was a result of lower oil and gas prices, as well as lower volumes being traded and lower margins for refining, which is the process when crude oil, the raw material extracted from the earth, is made into products such as diesel.
It added 2023 saw higher liquefied natural gas (LNG) trading. Many European countries turned to LNG as an alternative source of energy after Russia cut its supplies of natural gas to continent. As a result, the British company posted profits of $7.3bn in the final three months of 2023, which exceeded analysts' expectations but was down from a record $9.8bn in the same period the year before.
“As we enter 2024 we are continuing to simplify our organisation with a focus on delivering more value with less emissions,” said Wael Sawan, Shell's chief executive.
Energy prices have been much higher for households and businesses in recent years. Bills first began to climb after the end of Covid lockdowns, but surged in March 2022 after the outbreak of war in Ukraine led to demand surging due to concerns over supplies.
The price of Brent crude oil reached nearly $128 a barrel following the invasion, but has since fallen back and is currently at about $80. Gas prices also spiked but have come down from their highs.
The 2022 surge in prices led to all energy companies, including the likes of Shell and BP, to make bumper profits. In response, the government introduced a windfall tax – called the Energy Profits Levy – on the “extraordinary” earnings of firms on their UK operations to help fund a scheme to subsidise gas and electricity bills.
Shell confirmed it paid $802m in UK windfall tax for 2022, but declined to comment on the figure paid for last year. A company spokeswoman said the company paid $1.5bn in overall tax in the UK for 2023. It is likely the windfall tax figure would be lower due to the Shell's profits falling. The company had said previously that expected to pay more than $500m.
Shell said it returned $23bn to its shareholders in 2023, and was now increasing its dividend by 4% and beginning a $3.5bn share buyback programme over the next three months.
— CutC by bbc.com
