Shell says it won’t pay any windfall tax this year despite record profits

Oil giant gets tax relief because of North Sea investments, as Labour, Lib Dems and Greenpeace call for ‘proper windfall tax’ on energy firms’ profits

Shell’s renewables and energy solutions business remained in the red in the three months to September, including the value of the group’s commodity hedges. Excluding these, cash profits were $530m, down 48% from the previous quarter due to price volatility and rising operating expenses.

Laura Hoy, equity analyst at Hargreaves Lansdown, said:

With oil prices down from their triple-digit highs this summer, it was inevitable to see big oil’s profits start to thin. However nearly $7bn in profits for the quarter is nothing to sneeze at, and is a far cry from the losses Shell suffered last year. Although the group isn’t printing money at record pace anymore, oil prices are still elevated by historical standards and that means Shell has more than enough to continue boosting shareholder rewards.

Notably, apart from modest contributions from its retail network, Shell’s oil and gas exploration and extraction business is bringing home most of the bacon. This is to be expected, particularly in an environment where oil prices are elevated. Eventually we’d like to see cleaner parts of the business start to make up a bigger slice of the pie. The renewables business has gotten a lot of attention lately given the incoming CEO Wael Sawan was its head, but a quarter-on-quarter decline in profits suggests there’s still a long way to go before this part of the business will make it into the black.

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