and Shell, two of the biggest carbon emitters in the world, reported
combined annual profits yesterday of nearly £90m a day, earned largely
from oil production, refining and petrol stations.
The earnings triggered protests from trade unions and fuel poverty groups as well as environmental campaigners.
net income of $39.5bn (£20bn) last year is the largest ever recorded in
US corporate history and comes amid mounting fears worldwide about the
impact of CO2 output on global warming.
Shell's profits of $25bn were up 21% on a year earlier, over a period
when oil prices soared to $80 a barrel, although they have slipped back
30% since last summer.
van der Veer, Shell's chief executive, declined to give a figure for
the company's carbon emissions for the 12-month period but the company
confirmed that the figure for 2005 was 102m tonnes - more than some 150
countries produce each.
Shell insisted it would be "pointless" to
say how much of Shell's $23bn of capital expenditure was going into
renewable energy schemes. Mr van der Veer indicated that the investment
in renewables was small, saying it would be "throwing money away" to
invest in alternative energy projects that were uncommercial and people
could not afford to buy. "We have to put more into research and get a
value proposition," he said.
Friends of the Earth took out
full-page newspaper adverts yesterday that demanded of Shell: "Use your
profits to clean up your mess." It pointed to gas flaring in Nigeria,
leaking pipes in South Africa and endangered whales at Sakhalin as
examples of environmental damage.
But Mr van der Veer said the
environmental group's claims were ill informed and insulted his staff.
"I do not like Shell people being portrayed as people not doing a good
job," he said angrily.
The strong financial performance of Shell
was helped by a strong fourth quarter but Exxon saw its profits fall
slightly to $10.25bn over that period, largely as a result of a drop in
natural gas prices and lower oil production volumes.
its output volumes had fallen partly due to sabotage and unrest, which
has halted most production in the Niger Delta. It also said growth in
output of only 1% or 2% should be expected up to 2010, partly due to
the forced sale of its Sakhalin-2 scheme in Russia as well as problems
in Nigeria, although it said production should increase by 3% or 4%
The Anglo-Dutch group admitted that the reduced
holding in the Sakhalin gas project would knock 0.4bn barrels of oil
equivalents off its reserves base in 2007 when the deal should be
Shell boasted that its reserves replacement ratio
was likely to reach 150% as it added more than 2bn barrels of oil
equivalents for the second year in a row. But officials admitted later
that much of this came from gas-to-oil plus oil sands projects -
reserves that are far more expensive to produce than traditional oil
The company has been moving into increasingly tough
political terrain such as Russia and even Iran, despite US opposition
to investment in that country. Mr van der Veer admitted this was a
"dilemma" but insisted Shell was some way off making a definite
decision on the huge South Pars gas project there, which could put it
on a collision course with Washington.
The Shell boss declined to
completely bury continuing speculation of a possible merger between his
company and the currently troubled BP. "I'm not even going to comment
on those kinds of rumours," he said but had earlier stated: "We don't
shy away from acquisitions ever."
Green groups were not alone in
their concerns about Shell's profits, with union leaders calling on the
company to spend more in the North Sea, where there have been several
safety scares amid concerns that spending had been cut in the past.
Tran, an Amicus regional officer, said: "It's time for Shell to
evaluate its commitment to the North Sea and its staff. Offshore safety
statistics are moving in the wrong direction. Shell needs to ensure its
workers can operate in the safest possible environment. They will have
to revisit their already committed spend on maintenance backlog, with a
view to increasing it significantly."
National Energy Action, an
energy efficiency charity, called on the government and Shell to use
some of the "surging" profits to help fight fuel poverty.