LONDON: British energy giant Shell unveiled record annual net profit of US $42.3 billion on Thursday, due to rising oil and gas prices, sparking outrage from green groups and unions as the UK continues to suffers a cost-of-living crisis.
The post-tax figure, which was fuelled by the invasion of Ukraine by major energy producer Russia, was more than double what Shell had achieved in 2021, according to Shell's earnings statement.
Revenue went up 45 per cent to a dizzying US $381 billion in 2022, a huge gain by rivals.
The cost of heating and lighting their homes and businesses has gone up as a result of colossal profits for energy majors around the world.
Greenpeace protested outside Shell's London headquarters on Thursday, arguing that the group was profiting from climate destruction. Trades Union Congress said an increased windfall tax could help fund wage rises for public sector workers who are currently locked in a wave of strikes over pay that lags soaring inflation.
Instead of holding down the pay of teachers, firefighters and millions of other hard-pressed public servants, ministers should be making big oil and gas pay their fair share, said TUC general secretary Paul Nowak.
Shell said it would return a further US $4 billion to shareholders after huge buybacks last year and would significantly lift its dividend following record earnings.
New Chief Executive Wael Sawan said that the results statement showed the strength of Shell's differentiated portfolio, as well as our capacity to deliver vital energy to customers in a volatile world.
Shell is looking to reinvent itself under the company's former renewables boss Sawan, who replaced Ben van Beurden in the top seat at the beginning of the year.
Energy firms are under increasing pressure to switch away from fossil fuels as the world struggles to become a net-zero emissions economy by the year 2050.
Oil continues to play a major role in the global energy system for the next 15 to 20 years, as Shell rival BP said on Monday that while the transition could be accelerated by Russia's war in Ukraine, oil continues to play a significant role in the global energy system. The invasion of Ukraine a year ago by Russia sent oil and gas prices rocketing.
Russia is a major producer of fossil fuels and the war resulted in slashed supplies.
Shell released an update two days after ExxonMobil reported an even bigger record profit of almost US $56 billion and handing massive windfalls to shareholders.
The US President Joe Biden has hit American energy giants like Chevron, insisting they should be helping to reduce energy prices during a cost-of-living crisis.
On Tuesday, Biden said that the only thing stopping Big Oil from increasing production and therefore lowering prices is their decision to pay shareholders billions instead of reinvesting profits.
Windfall taxes on mammoth profits have been introduced in a bid to ease the pain for consumers.
Shell has revealed that windfall taxes imposed by the European Union and the UK on the surge in earnings would cost the group about US $2 billion.
The financial muscles at Shell have been flexed on a massive scale while the waves of an economic cycle can bring major challenges as well as rewards, said Richard Hunter, head of markets at Interactive Investor.
There could also be bumps in the road if a mild global recession occurs, due to the fluctuating opinions surrounding demand from China after its reopening.