Two of the biggest oil and gas operators in the UK North Sea have today announced bumper profits totalling more than £22.6 billion.
London-headquartered Shell hauled in £11.57bn in pre-tax profits during the first three months of 2023 – equating to about £128.6 million a day, or nearly £1,500 per second.
The quarterly total is up more than one-third from about £8.7bn a year ago.
Norway’s Equinor posted profits of £11.05bn for Q1 2023 – £122.8m a day, or about £1,420 per second.
Its total for the three months is down from about £13.9bn a year ago.
More profits, more tax
North Sea operators are paying more to the UK Treasury as a result of the energy profits levy – the so-called “windfall tax”.
But the colossal earnings of firms including Shell, Equinor and BP, which reported its first quarter results on Tuesday, continue to anger people amid the cost-of-living crisis.
Campaign groups like Global Witness and Greenpeace have used the results to argue for more taxation for the industry.
The oil and gas sector has warned the levy will drive away investment. North-east business leaders including Sir Ian Wood tend to agree.
Shell highlighted “adjusted earnings” of £7.7bn for the first quarter of 2023, up 5% year-on-year.
Revenue totalled £70bn, up from about £68bn in the same period last year.
Total oil and gas production was down slightly in the latest period, compared with a year ago, at 2.9 million barrels of oil equivalent (boe) per day.
Net debt also fell slightly, from £36.1bn at the end of Q4 2022 to £35.6bn.
Shell’s investors pocketed a total of £5.08bn in shareholder “distributions” during Q1.
The company is planning a further £3.2bn of share buybacks before the end of June.
Shell gave no breakdown of its UK profits or tax bill for the latest quarter, having stumped up £356m in windfall tax in Q4 2022.
Financial services firm AJ Bell said Shell’s better-than-expected figures were “some feat” and a “solid start” for new chief executive Wael Sawan.
What are critics of ‘big oil’ profits saying?
But Liberal Democrat leader Sir Ed Davey said they highlighted the need for a “robust” windfall tax to protect struggling families.
He added: “Energy giants like Shell should not be able to rake in huge profits while families across the country are struggling to make ends meet.”
TUC general-secretary Paul Nowak said: “These obscene profits are an insult to working families.
“As households up and down Britain struggle to pay their bills and make ends meet, Shell is enjoying a cash bonanza.
“The time for excuses is over. Instead of holding down the pay of paramedics, teachers, firefighters and millions of other hard-pressed public servants, ministers should be making ‘big oil and gas’ pay their fair share.”
Unite the Union general-secretary Sharon Graham described “profiteering” by Shell and BP as “one of the corporate scandals of our times”.
She added: “This is practically untouched by Rishi Sunak’s so-called windfall tax.”
Campaign group Global Justice Now said: “It’s hard to stomach another iniquitous profit announcement from Shell, all whilst the country struggles in the grips of a cost-of-living crisis.”
Equinor pointed to adjusted earnings of about £9.7bn, after tax, for the first quarter of 2023 – up by one-third year-on-year despite reduced prices for oil and gas.
Revenue was down 20% year-on-year at £23.5bn,
The state-owned firm produced 2.13 million boe per day in the latest period, up slightly on 2.1m in Q1 2022.
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