Shell reports $9.5bn profit for Q3

Shell has reported its second highest quarterly profit on record, with operating profit reaching $9.5bn in the third quarter of 2022.

This is more than double the oil and gas company’s $4.2bn profit in the same period last year.

In the first half of this year Shell reported two consecutive quarters of record profit as oil and gas prices soared.

Between April and June the company saw record profit of $11.5bn. Since then, profit growth has slowed as oil prices fell back.

Shell’s latest quarterly report has prompted calls for the tax on the profits of oil and gas firms to be increased to help households facing high energy bills this winter.

Shadow climate change secretary Ed Miliband said that Shell’s profits this year were “further proof” that the UK needs a proper windfall tax to make sure energy companies “pay their fair share”.

Meanwhile, Frances O’Grady, general secretary of the TUC, said that Shell’s profits were “obscene” at a time when millions of people are struggling with soaring bills.

Major energy companies seen huge profits in 2022 due to the elevated prices for oil and gas following Russia’s invasion of Ukraine in February.

Shell’s $400 million Niger Delta security funds better invested on local communities — report

Oil giant Shell has spent almost $400m in three years guarding its installations in the Niger Delta, including maintaining its own 1,200-strong internal ‘police’ force, running a network of plainclothes informants and supplying government forces with equipment, according to Platform, a campaign group.

Platform combed through leaked internal documents and WikiLeaks diplomatic cables to unpick Shell’s $1bn security spend between 2007 and 2009 – of which almost 40% was spent protecting its Nigerian facilities. The group also looked at Shell’s close relationship with government forces dating back to 2003. The Observer reported on the organisation’s findings yesterday.

Shell’s colossal Niger Delta facility has come under frequent attack from armed insurgents, who are frustrated by the local population’s exclusion from the Delta’s incredible oil wealth and by pollution. Kidnappings of oil workers, robberies and attacks on pipelines were frequent during the period covered by the documents.

Shell’s facilities in the Niger Delta are protected from armed insurgents by 600 police and 700 members of the Joint Task Force (JTF), which combines army, navy and air force. Platform claims in 2008 Shell spent almost a third of its global security budget – $99m – on ‘third parties’, which is believed to include supporting such Nigerian government forces such as the JTF.

‘Shell has supplied these government forces with gunboats, helicopters, vehicles, food, accommodation, satellite phones, stipends and large-scale funding throughout years of conflict in the Delta region,’ Platform notes.

Related article: Embassy cables reveal Western complicity in Nigerian oil conflicts

Platform is concerned that JTF has a poor record on human rights violations. In 2009 alone, Platform estimates Shell provided $65m to the Nigerian government. ‘This is a staggering transfer of company funds and resources into the hands of soldiers and police known for routine human rights abuses,’ the campaign group notes. The same year, the Nigerian military used helicopter gunships to launch an campaign lasting several weeks against the camp of a militant leader named Government Tompolo in the Delta.

The US State Department said the attacks displaced ‘tens of thousands’ and cost them their livelihoods, as well as killing an unknown number of people.

Platform suggests that at the time of these attacks Shell was providing extensive financial support to the JTF. ‘Instead of holding government forces to account by ensuring that abuses were properly investigated and appropriate punishment or disciplinary action taken, Shell rewarded the JTF with lucrative funding and support,’ Platform notes.

In many cases, Shell’s security spending may only serve to entrench the conflict. The security spending documents show Shell spent $75m on a mysterious category marked ‘Other’. WikiLeaks cables reveal that in 2003 Shell was among oil companies making payments of up to $300 a month, and Shell ‘frequently’ pays off armed groups, for example to regain access to closed-off facilities.

But this can encourage groups to battle for control of particular towns or facilities: in one case documented by Platform, the town of Rumuekpe was completely destroyed by rival armed groups struggling for access to alleged payments from Shell, with an estimated 60 people killed.

Meanwhile, of the $35m spent on private security contractors in 2008, Platform claims that local contracts often turn out to be with the very militants they are targeting. And the hardline approach of external contractors, many of whom have shipped in as contracts dry up in Iraq and Afghanistan, only fans the flames of conflict. Private contractors often give orders to military personnel guarding oil facilities, muddying the line between corporate and government responsibility for incidents, Platform adds.

‘What is striking about Shell’s security spending in Nigeria is its ineffectiveness,’ the report notes. Investing in communities and cleaning up ‘decades’ of pollution, the report suggests, could yield very different results.

This version of the story was first published by The Bureau of Investigative Journalism.

Shell names new deadline for Cove Energy bid

Royal Dutch Shell Plc (LON:RDSA) announced on Thursday a new extension until 25 July for its £2.20 ($3.41/€2.80) a share takeover offer for Cove Energy Plc (LON:COV), after securing 3.27% in the British oil and gas explorer by the previous deadline on 11 July.

Of the total acceptances, irrevocable commitments cover only 0.95% of the target’s capital, the buyer said.

The offer, valuing Cove at around £1.12bn in total, was agreed in April and outmatched by Thai oil and gas explorer PTT Exploration and Production Pcl (PINK:PEXNY), or PTTEP, which proposed in late May to buy Cove at £2.40 per share.

At the time, Shell said that in the light of the higher rival offer it was looking into options regarding its own bid. Its offer, launched on 2 May, was first extended to 13 June and further until 28 June and 11 July.

Shell wants to buy Cove to strengthen and diversify its global liquefied natural gas (LNG) portfolio of production and development projects, it has said. Cove’s board agreed to back the deal in April, but later withdrew its support and accepted the £1.22bn transaction with PTTEP, whose offer is also running with a new deadline set for 13 July. PTTEP said its bid won 0.25% acceptance by 6 July.

Both bids are subject to winning an acceptance level of at least 90%.

In an earlier comment, Cove’s CEO John Craven said that the offer from the Thai group represented substantial value for shareholders, while recognising the world-class nature of Cove’s assets in East Africa.

EC refers Shell’s sale of Shell Aviation Espana to Disa to local competition regulator

The European Commission (EC) said on Friday it had sent to the Spanish competition regulator for review the planned deal by Royal Dutch Shell plc (LON:RDSA) to sell a stake in its Spanish aviation fuels unit Shell Aviation Espana SL (SAE) to domestic Disa Corporacion Petrolífera SA.

Spain’s Comision Nacional de la Competencia (CNC) requested on 22 May 2012 that the EC allowed it to assess the deal which it sees to create competition problems in the country.

Following a preliminary review by the EC, the European Union regulator said that CNC is best placed to investigate the transaction as it would only affect sectors of the Spanish market.

The CNC expressed concerns that a combination of Disa and SAE could impact sectors connected to into-plane services provision, including logistic services and petroleum products storage, in the Canary Islands.

The proposed deal could result in existing and future competitors losing access to Disa’s storage facilities and logistic services and could also lead to coordinated effects in the fuel sectors in the Canary Islands, the CNC said.

Under the planned transaction, Shell is selling a controlling stake in its Spanish aviation fuel subsidiary SAE to Disa.

Currently Shell owns 100% of SAE, which offers into-plane services at Spanish airports Las Palmas, Fuerteventura, Lanzarote, Tenerife North and Tenerife South.

Disa is an oil company with operations including sale, storage and transport logistic services of petroleum products in the Canary Islands.

Shell considers options after PTT trumps its bid for Cove Energy

Royal Dutch Shell plc (LON:RDSA), pursuing Cove Energy Plc (LON:COV), said on Thursday it was looking into options after Thai oil and gas explorer PTT Exploration and Production Pcl (PINK:PEXNY), or PTTEP, had made a higher, rival offer of GBP2.40 (USD3.80/EUR2.99) a share for the British oil and gas explorer.

Shell, which is currently carrying out a GBP2.20 a share takeover offer for Cove, said it would announce its decision when appropriate.

In the meantime, Shell extended its own offer until 13 June, saying it had secured acceptance for 4.83% in Cove by the bid’s first closing date on 23 May.

The Dutch oil group agreed on 24 April to take over Cove in a deal worth some GBP1.12bn, hoping to strengthen and diversify its global liquefied natural gas (LNG) portfolio of production and development projects.

Cove’s board agreed to back the deal at the time, but it withdrew its support on Wednesday when PTTEP proposed a higher price of GBP1.22bn, saying it was now recommending shareholders to accept PTTEP’s offer.

In his comment, Cove’s CEO, John Craven, said this latest offer represented substantial value for shareholders while recognising the world-class nature of Cove’s assets in East Africa.
For the Thai buyer, the deal allows it to leverage its LNG value chain, in line with the group’s long-term strategic priorities, CEO, Tevin Vongvanich said.

Both offers are subject to winning an acceptance level of at least 90%.