Shell expects to pay $2bn in windfall tax as LNG trading improves
Several European governments and Britain have imposed windfall taxes on energy companies this year to rein in excess profits as energy prices have soared since Russia’s invasion of Ukraine.
06 January 2023 - 12:17
byRon Bousso
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London — Earnings from Shell’s liquefied natural gas (LNG) trading operations are likely to have been significantly higher in the fourth quarter of last year despite a sharp output drop owing to plant outages, it said on Friday.
Europe’s largest oil and gas company’s update ahead of its full-year results on February 2 also said it expects to pay about $2bn (R34.5bn) in additional 2022 taxes related to the EU and British windfall taxes imposed on the energy sector.
Fourth-quarter LNG liquefaction volumes are expected to be the lowest since the company acquired BG Group in 2016 for $53bn , dropping to between 6.6-million and 7-million tonnes as a result of prolonged outages at two major plants in Australia.
But Shell, the world’s top LNG trader, said its LNG trading results are set to be “significantly higher” than in the previous quarter.
Shell shares rose nearly 1% as the market opened.
Shell’s third-quarter results were dented by weaker refining performance and a slump in LNG trading.
The LNG trading division recorded a loss of nearly $1bn in the third quarter after traders were caught out by a sharp rally in European gas prices when Russia halted supplies.
Yet Shell remained on track for record annual profit in 2022, having posted earnings of $30bn in the first three quarters, just shy of the 2008 record profit of $31bn.
Shell said it expects fourth-quarter oil product trading results to be “significantly lower” than the third quarter.
London-based Shell, whose CEO Wael Sawan succeeded Ben van Beurden on January 1 after nine years at the helm, said in October that it intends to increase its dividend by 15% in the fourth quarter.
Several governments across Europe and Britain have imposed windfall taxes on energy companies this year to rein in excess profits as energy prices have soared since Russia’s invasion of Ukraine.
Shell expects to pay $2bn in taxes related to the windfall levies on top of $360m it announced earlier in 2022.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Shell expects to pay $2bn in windfall tax as LNG trading improves
Several European governments and Britain have imposed windfall taxes on energy companies this year to rein in excess profits as energy prices have soared since Russia’s invasion of Ukraine.
London — Earnings from Shell’s liquefied natural gas (LNG) trading operations are likely to have been significantly higher in the fourth quarter of last year despite a sharp output drop owing to plant outages, it said on Friday.
Europe’s largest oil and gas company’s update ahead of its full-year results on February 2 also said it expects to pay about $2bn (R34.5bn) in additional 2022 taxes related to the EU and British windfall taxes imposed on the energy sector.
Fourth-quarter LNG liquefaction volumes are expected to be the lowest since the company acquired BG Group in 2016 for $53bn , dropping to between 6.6-million and 7-million tonnes as a result of prolonged outages at two major plants in Australia.
But Shell, the world’s top LNG trader, said its LNG trading results are set to be “significantly higher” than in the previous quarter.
Shell shares rose nearly 1% as the market opened.
Shell’s third-quarter results were dented by weaker refining performance and a slump in LNG trading.
The LNG trading division recorded a loss of nearly $1bn in the third quarter after traders were caught out by a sharp rally in European gas prices when Russia halted supplies.
Yet Shell remained on track for record annual profit in 2022, having posted earnings of $30bn in the first three quarters, just shy of the 2008 record profit of $31bn.
Shell said it expects fourth-quarter oil product trading results to be “significantly lower” than the third quarter.
London-based Shell, whose CEO Wael Sawan succeeded Ben van Beurden on January 1 after nine years at the helm, said in October that it intends to increase its dividend by 15% in the fourth quarter.
Several governments across Europe and Britain have imposed windfall taxes on energy companies this year to rein in excess profits as energy prices have soared since Russia’s invasion of Ukraine.
Shell expects to pay $2bn in taxes related to the windfall levies on top of $360m it announced earlier in 2022.
Reuters
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