Sharply increased oil and gas prices as a result of the Ukraine war have caused the tills of the energy and oil companies to ring again. Shell, Repsol and Totalenergies again presented profits in the billions and were thus able to clearly top the previous year’s figures. However, because of their high profits, the corporations are criticized by governments that are struggling with high energy costs.
The French oil and gas group Totalenergies increased its profit by 43 percent to USD 6.6 billion in the third quarter, despite another write-down in Russia. Total Energy had to write off $3.1 billion on a stake in a Russian gas producer. Adjusted for special effects such as the depreciation, Totalenergie achieved a record result of almost 9.9 billion dollars, as the company listed in the EuroStoxx 50 announced on Thursday. That was significantly more than experts had expected.
Oil company Shell posted the second-highest profit in the company’s history, but adjusted profit of $9.45 billion in the third quarter was slightly below analysts’ expectations. In addition, the Group’s level of indebtedness increased unexpectedly. In addition to a higher dividend, Shell announced plans to buy back an additional $4 billion of shares over the next three months. That brings the total amount of buybacks this year to $18.5 billion.
Excess profit tax does not yet apply at Shell
Despite the high profit in the third quarter, the Shell group was initially not affected by the excess profit tax (“windfall tax”) in Great Britain because it invested a lot of money in production in the North Sea. CFO Sinead Gorman said Shell could have to pay taxes in early 2023.
At the Spanish oil company Repsol, the adjusted net result in the third quarter rose from 623 million euros in the previous year to almost 1.48 billion euros thanks to strong profits due to the high oil prices. However, analysts had expected a little more here as well.
In addition, the Spanish company is making faster progress with the planned share buyback. By the end of the current year, 200 million of its own shares are to be bought back and withdrawn, Repsol announced in Madrid. In the years that follow, a further 50 million banknotes are to be bought back. Originally, the oil company wanted to buy back 50 million shares annually between 2021 and 2025 – a total of 250 million.
