soaring hydrocarbon prices propel tanker profits


TotalEnergies saw profits soar to $5.7 billion in the second quarter, while Shell on Thursday posted a whopping $18 billion net profit for the same period.

Quarterly profit more than doubled for the French TotalEnergies, quintupled for the British Shell: the prices of hydrocarbons, which have soared since the Russian invasion of Ukraine, propel the profits of the oil giants and fuel criticism over the use of this windfall . TotalEnergies saw profits soar to $5.7 billion in the second quarter, while Shell on Thursday posted a whopping $18 billion net profit for the same period.

“It is inevitable that with such strong results, the way the company uses its earnings will come under scrutiny,” said Michael Hewson, analyst at CMC Markets. But the surge in profits “also raises the question of whether Shell will be able to maintain this level of profitability in the second half of the year”.

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Shell had already unveiled a record first-quarter profit of $7.1 billion, despite a heavy burden from the phasing out of its oil and gas business in Russia.

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Faced with the profits of the oil majors, London announced in May an exceptional tax on the energy sector, in part to help finance government aid to the poorest households in the face of the cost of living crisis.

The measure was loudly demanded by NGOs and the Labor opposition, but the conservative majority held back for a long time, fearing to discourage investment by companies in the sector, before giving in.

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Climate strategy

In France too, these huge oil profits fueled a debate on a tax on the “superprofits” of large multinationals, before the idea was narrowly rejected on Saturday by the National Assembly despite protests from the left and the far right.

Instead, TotalEnergies announced a discount of 20 euro cents per liter of fuel at the pump between September and November in all its service stations, then 10 cents per liter for the rest of the year.

The environmental NGO 350.org denounced Thursday the “staggering” profit of the French group while this “oil giant is responsible for some of the most destructive fossil fuel projects on the planet”, citing in particular a controversial pipeline project in East Africa.

Shell had been heckled during its general assembly in May, with the irruption of environmental activists and questions from shareholders asking the group to go further in its climate strategy – finally validated at nearly 80%.

The environmental organization Greenpeace also launched an action on Tuesday in Scottish justice against a permit granted in June to Shell by the British government for the exploitation of the controversial gas field of Jackdaw.

gas crisis

Admittedly, the memory is still fresh of the colossal losses announced by oil giants struck down, around the globe, by the brutal collapse of consumption during the pandemic. Shell had, for example, taken a charge of $16.8 billion in the second quarter of 2020.

But the prices of hydrocarbons have rebounded and have been soaring for months, particularly after the Russian invasion of Ukraine. With the key to “solid financial results” for Shell, welcomed its managing director, Ben van Beurden, on Thursday. This is evidenced by a $6 billion share buyback program to be executed in the current quarter, after a previous buyback of $8.5 billion completed in early July.

However, if Shell knows how to take care of its shareholders, the group also claims to use its financial solidity for the benefit of the general interest, “thanks to secure energy supplies”, argued Mr. van Beurden, during a press conference.

As Europe shivers in the face of gas prices, which these days are again approaching the highs seen after the start of the war in Ukraine, Shell “has a role to play” and the company is notably doing “everything that ‘it can to bring new supplies’ to the Old Continent, he assures.

On the stock market Thursday at midday, the action of TotalEnergies fell 3.36% to 48.08 euros and that of Shell took 1.58% to 2,151 pence.



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