May 25, 2024

How oil theft, spill, obsolete pipeline infrastructure, others plummet Shell’s profit to $19.4 bn

By Godfrey Okoro

There are strong indications that excessive oil spillage, obsolete pipeline infrastructure in Nigeria and other negative factors in international oil business may have pushed shell’s profit earning downwards to $19.4 billion.

In its latest earnings report released yesterday, Shell said its net profit was slashed more than half to $19.4 billion in 2023 as oil and gas prices weakened.

However, EnergyDay observed that oil spillage which occurred at the Trans Niger pipeline on June 11, 2023 which lasted for four days and other infrastructure decay may have triggered the profit downward spiral.

Also, the report stated its full year 2023 income which reflected lower oil and gas prices, lower volumes and lower refining margins, was slammed by impairment and other accounting charges totalling $7.5 billion.

Despite the decline, Shell said it was returning $3.5 billion to shareholders while ramping up its fourth-quarter dividend.

Shell Chief Executive, Wael Sawan stated “ As we enter 2024, we are continuing to simplify our organisation with a focus on delivering more value with less emissions.

What you should expect coming in March is real clarity on the areas we will continue to go forward with, not a bunch of new targets”

He insisted that the company’s overall goal to achieve net zero carbon emissions by 2050 remains intact even as the energy sector still looks to profit from the relatively high cost of oil and gas.

Shell on Thursday added that net profit tumbled 93 percent to $474 million in the fourth quarter on large impairments, particularly linked to chemical assets in Singapore.

Net profit excluding exceptional items sank nearly a third to $28.3 billion last year — but this beat market expectations.