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Shell and BP face tough job of keeping customers and investors happy as profits roll in

The Guardian

Shell and BP face tough job of keeping customers and investors happy as profits roll in

The oil giants will also have to contend with intensifying calls to put more money into clean energy

The bosses of Shell and BP face the same task as they prepare to present their companies’ annual results this week, but at completely different points in their tenures. Wael Sawan will make his City debut after taking over as Shell chief executive at the start of the year. Bernard Looney marks three years since a watershed presentation in London when he took over at BP, unveiling a target to hit net zero by 2050 or sooner.

The pair now each have the task of convincing the public they are not profiteering during the energy crisis – while keeping investors sweet. Profits surged in 2022 on the back of high gas prices caused by the invasion of Ukraine, and are expected to stay high against historical averages this year, while oil prices have climbed in early 2023 as the Chinese economy reopens.

Sawan will take his bow first, on Thursday, as he fronts Shell’s first full-year results since completing the relocation of its headquarters to London – where the business began as an importer of oriental seashells in the 1830s. He’s wasted little time since taking the role, having put Shell’s Europe home energy supply businesses under review. Shell’s figures will be suitably eye-watering: adjusted annual profits are expected to come in around $83bn (£67bn) against $55bn a year ago, including around $19bn in the final quarter of the year, against $16.3bn in the same period of 2021.

The firm’s prized dividend – which was cut during the Covid crisis for the first time since the second world war – has been lifted by 15%. Shell is spending $18.5bn buying back its own shares this year, a statistic that has only increased the calls for the firm to allocate more of its cash pile towards renewable energy and less to rewarding shareholders. This year’s capital investment is expected to come in at between $23bn and $27bn, but renewables will make up a relatively small proportion of this.

If Sawan chooses to change this narrative and ramp up the company’s green spending, he will be following in Looney’s footsteps.

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