SHELL PROFIT WARNING

Posted by John Donovan: 9 Jan 25

The headline “Oil giant Shell warns of £2bn blow as it struggles to close the gap with US rival” is from an article posted today by This is Money.co.uk, which inspired the article below.

Shell’s Billion-Pound Sob Story: Lower Profits, Less Gas, and Renewables on the Chopping Block

Stop the presses: Shell, the planet’s favorite polluting powerhouse, has issued a profit warning. The oil and gas supermajor—famous for greenwashing, corporate greed, and a knack for ruining ecosystems—is bracing for a sharp decline in Q4 profits and gas production. Adding insult to injury (or irony to incompetence), the company is also swallowing a £1 billion charge in its renewables unit. Let’s dissect the trainwreck.

Gas Business in Trouble? Call the Whaaambulance

Shell has warned investors that its gas profits and production will be significantly lower in the fourth quarter. Apparently, the “world’s largest trader of liquefied natural gas (LNG)” is having a tough time as hedging contracts expire, production forecasts dwindle, and the energy giant struggles to maintain its dominance. But don’t worry—Shell’s PR machine will find a way to spin this as part of their “commitment to cleaner energy.”

For Q4, LNG production has been trimmed to 6.8 to 7.2 million tons, down from 7.5 million tons in Q3. Lower volumes, lower trading results, and lower margins? Poor Shell. It’s almost as if relying on fossil fuels isn’t the forward-thinking strategy they want us to believe it is.

Renewables: Conveniently Disposable

The pièce de résistance of this disaster? A £1 billion charge in Shell’s renewables unit, which the company says is related to the “timing of payments for emissions certificates in Germany and the U.S.” Let’s be real: this is less about accounting quirks and more about Shell’s reluctance to put real effort into clean energy. After all, renewables don’t rake in billions as quickly as oil and gas.

Adding to the insult, Shell recently announced it’s pulling back from new offshore wind investments and carving up its power division to focus on “the most profitable parts of the business.” Translation: fossil fuels forever, baby.

Wael Sawan’s Valuation Tantrum

CEO Wael Sawan is still pouting about Shell’s valuation lagging behind U.S. rivals ExxonMobil and Chevron. His solution? Threatening to yank Shell off the London Stock Exchange and relist in New York. “We have to look at all options,” Sawan declared last year, proving that loyalty to British markets (and by extension, accountability) takes a backseat to chasing Wall Street’s sin-stock stardom.

Why move? Because in the U.S., investors reward audacious polluters like ExxonMobil and Chevron with higher valuations and fewer questions about their environmental carnage. Sawan’s dream is to join their ranks—and if it means throwing London under the bus, so be it.

Shareholders and Their Crocodile Tears

Let’s not forget Shell’s biggest enablers—mega-investors like BlackRock and Vanguard—who keep cashing in while Shell cuts renewables and doubles down on fossil fuels. Even Russ Mould, investment director at AJ Bell, called Shell’s Q4 update “disappointing for the market.” Sure, because Shell’s profits falling slightly short of obscene is such a tragedy.

A Sin Stock to the Core

Shell’s latest quarter is a case study in hypocrisy:

•Cutting Renewables: Slashing new investments and writing down £1 billion while claiming to lead the energy transition.

•LNG Obsession: Betting on a fuel with significant greenhouse gas emissions under the guise of “cleaner energy.”

•Profit Warning: Struggling to maintain margins while ignoring the reality of the climate crisis.

And yet, Shell continues to hold its ground as the ultimate sin stock, prioritizing shareholder returns over everything else. Lower demand in its chemicals and oil products division, weaker trading results, and a decline in gas profits are framed as temporary hiccups. But let’s face it: Shell’s real problem is its refusal to fully embrace a future without fossil fuels.

Here’s the bottom line: Shell is hemorrhaging money in renewables while doubling down on the very business model that’s destroying the planet. Their gas production woes, profit warnings, and retreat from offshore wind are just the latest examples of a company that says one thing and does another.

CEO Wael Sawan’s Wall Street ambitions are the cherry on top. Moving Shell to New York isn’t about growth or innovation—it’s about chasing bigger profits in a market that values greed over accountability. Investors like BlackRock and Vanguard may continue cheering, but for the rest of us, Shell’s antics are as predictable as they are infuriating.

So here’s to Shell: the ultimate sin stock. Forever chasing profits, forever polluting, and forever proving that when it comes to the energy transition, they’re running as fast as they can—in the wrong direction.

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