Shell paid its investors a total of $22.5bn (£18.1bn) in 2024, narrowly short of the company’s own profits for the year, which tumbled in line with weaker oil and gas markets.
Europe’s biggest oil company handed its investors the multibillion-dollar windfall despite reporting weaker-than-expected profits of $23.7bn. It has faced calls from climate campaigners to divert more of its profits to renewable energy projects and away from shareholder payouts.
The fossil fuel investors, which include major pension funds, are now in line for a 4% dividend increase alongside share buybacks of $3.5bn over the first three months of the year.
This could put investors in line for payouts of around $23bn in the year ahead, assuming that its buybacks remain at about $3.5bn a quarter.
Shell’s payouts lifted its shares 2.6% and helped the FTSE 100 index hit a record closing price of 8,646.88 points, a 1.04% gain.
Campaigners at Global Witness, which analysed the company’s financial reports, said the company had chosen to ply its investors with cash rather than increase its investments in clean energy alternatives.
Shell’s spending on oil and gas eclipsed its spending on renewables by more than seven times last year, according to the group’s analysis. Shell spent $18.3bn on its traditional fossil fuel businesses last year, and just over $2.5bn on “renewables and energy solutions” over the same period.
The lucrative quarter for Shell shareholders marks the 13th consecutive quarter in which Shell has given its investors buybacks of more than $3bn, despite worse than expected earnings from its oil and gas operations.
The company reported adjusted annual earnings of $23.7bn for 2024, missing the forecasts of City analysts who had expected an annual profit of just over $24bn for the year.
This represents another sharp drop in annual profits, after its full-year earnings tumbled to $28.25bn in 2023 from a record high of almost $40bn the year before, when Russia’s invasion of Ukraine roiled global oil and gas markets.
Shell has continued to offer its investors healthy returns despite the steady fall in its annual profits. The company’s chief executive, Wael Sawan, said Shell’s cashflows have remained strong, despite the profit slump, and it had shaved $3bn in costs from the business. Shell’s carbon emissions were “flat” compared with the previous year, he said.
Profits are expected to be lower for all major oil companies because of weaker market prices. Oil and gas prices have drifted lower over the last year despite the war in Ukraine and an escalation of the Gaza conflict.
The US benchmark price for gas, known as Henry Hub, averaged $2.33 per million British thermal units (MMBtu) down from $2.57 in 2023 – and well below the $6.50/MMBtu average in 2022 after Russia’s full-scale invasion of Ukraine.
Oil prices last year averaged $80.20 a barrel, and tumbled to an average of $74.40 in the final quarter, after averaging $82.60 in 2023 and more than $100 a barrel in 2022 as war broke out in Ukraine.
Alice Harrison, the head of fossil fuel campaigns at Global Witness, said the extreme weather and fire events of the past year had served as a reminder of “how exposed we all are to fossil-fuel driven climate extremes”.
“You would think this devastation would serve as a wake-up call to corporate giants like Shell, to start prioritising the energy transition we need to safeguard life on Earth. Instead, they’re continuing to rake in billions from planet-wrecking oil and gas.
“As we approach 10 years since the landmark 2015 Paris agreement, it’s high time governments held oil giants like Shell to account. Rather than propping up the climate-wrecking fossil fuel industry, we need governments to make polluters pay for the damage they have already caused, and steer us towards a cleaner, greener future,” Harrison said.
Campaigners at Greenpeace have called for oil companies to use their multibillion-dollar profits to pay for the damage caused by the climate crisis, which is fuelled by oil and gas production.
Elena Polisano, who leads the campaign, said: “Oil companies like Shell are causing the climate crisis, and they have the billions necessary to fund the clean-up of homes and communities – yet they don’t pay a penny for the loss and damage they cause. The UK government must act in the interests of the people it represents and make fossil fuel companies – not taxpayers – pay for the damage caused by flooding and other climate disasters.”
