Shell profit nearly triples in Q1

Profits at Shell almost tripled in the first quarter, according to company results published on May 5, on the back of higher oil and gas prices and strong trading performance.

The oil major, which recently moved its tax residence to the UK from the Netherlands, partly to avoid a 15% Dutch dividend tax, reported a record $9.13bn of adjusted earnings for the three-month period, up from $3.23bn a year earlier. Its free cash flow surged to $10.54bn, from $7.7bn, and the company also managed to bring its net debt to under $48.5bn by the end of March, from $52.6bn three months earlier.

Earnings from Shell's integrated gas division soared to $4.09bn, from $1.57bn in the first quarter of 2021, while its upstream earnings more than tripled to $3.1bn, from $912mn, supported by higher prices, which more than offset a 15% drop in production to 2.96mn barrels of oil equivalent/day. Earnings from chemicals and products also climbed to $1.07bn from $660mn, while marketing income slumped to $165mn, from $656mn.

Shell's net income also rose by a quarter to $7.12bn, despite the company taking a $3.9bn post-tax hit from its decision to withdraw from Russia. Its flagship asset in the country is a 27.5% interest in the Gazprom-operated Sakhalin-2 oil and LNG project in the Far East.

Shell's strong numbers come as pressure builds on the UK government to impose a windfall tax on the country's oil and gas industry that could provide funds to ease the cost of living crisis. The Conservative government led by prime minister Boris Johnson has so far resisted such calls for such a levy, which have been made by the main opposition parties, Labour and the Liberal Democrats. Poll booths opened on May 5 for the UK's council elections, which are seen as a crucial test for the government, which has suffered waning popularity in the wake of the Partygate scandal.