Shell to Pay $2 Billion in Windfall Taxes. Why the Stock Is Rising.

Shell Oil. Getty Images
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From Barron’s.  Shell, Europe’s largest oil and gas company, said it will have to pay about $2 billion in additional taxes in the fourth quarter, but still sees strong earnings from natural gas trading for the period.

The impact of the windfall taxes won’t affect adjusted earnings and will have a limited effect on cash because of the timing of the payments, the company said in a market update on Friday. Shares advanced 1.5% in early London trading.

Oil companies such as Shell (ticker: SHELraked in record earnings in 2022 after energy prices spiked in the wake of Russia’s invasion of Ukraine. That led governments to enforce windfall taxes to help pay for measures designed to cushion households from higher oil and gas costs.

Prices for fuel have since fallen back, but prospects for oil majors remain upbeat. It was one of the few sectors to flourish in 2022–Shell shares rose about 40% over the year.

Oil prices were stable on Friday. West Texas Intermediate, the U.S. benchmark, was at $73.65. Brent Crude, the international standard, also traded at $78.65.

Trading of liquefied natural gas was a highlight for Shell in the fourth quarter. Profits from the unit will be significantly higher than in the third quarter, despite a drop in output from plant outages, the company said.

Wael Sawan took over as chief executive officer of Shell on Jan. 1, replacing Ben van Beurden. In October, the company said it plans on increasing its fourth-quarter dividend by 15%. It reports earnings on Feb. 2.

Story by Brian Swint at Barron’s.  Write to Brian Swint at

The History of Shell (Wikipedia)

Shell plc is a British multinational oil and gas company headquartered in London, England.  Shell is a public limited company with a primary listing on the London Stock Exchange (LSE) and secondary listings on Euronext Amsterdam and the New York Stock Exchange. It is one of the oil and gas “supermajors” and by revenue and profits is consistently one of the largest companies in the world.  Measured by both its own emissions, and the emissions of all the fossil fuels it sells, Shell was the ninth-largest corporate producer of greenhouse gas emissions in the period 1988–2015.

Shell was formed in 1907 through the merger of Royal Dutch Petroleum Company of the Netherlands and The “Shell” Transport and Trading Company of the United Kingdom. The combined company rapidly became the leading competitor of the American Standard Oil and by 1920 Shell was the largest producer of oil in the world.  Shell first entered the chemicals industry in 1929. Shell was one of the “Seven Sisters” which dominated the global petroleum industry from the mid-1940s to the mid-1970s. In 1964 Shell was a partner in the world’s first commercial sea transportation of liquefied natural gas (LNG).  In 1970, it acquired the mining company Billiton, which it subsequently sold in 1994 and now forms part of BHP. In recent decades gas has become an increasingly important part of Shell’s business and Shell acquired BG Group in 2016

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