Group results

Earnings 2022-2021

Income attributable to Shell plc shareholders in 2022 was $42,309 million, compared with $20,101 million in 2021. With non-controlling interest included, income for the period in 2022 was $42,874 million, compared with $20,630 million in 2021. After current cost of supplies adjustment, total segment earnings in 2022 were $41,562 million, compared with $17,482 million in 2021.

Earnings on a current cost of supplies basis (CCS earnings) exclude the effect of changes in the oil price on inventory carrying amounts, after making allowance for the tax effect. The purchase price of volumes sold in the period is based on the current cost of supplies during the same period, rather than on the historic cost calculated on a first-in, first-out (FIFO) basis. When oil prices are decreasing, CCS earnings are likely to be higher than earnings calculated on a FIFO basis and, when prices are increasing, CCS earnings are likely to be lower than earnings calculated on a FIFO basis.

Integrated Gas earnings in 2022 were $22,212 million, compared with $8,060 million in 2021. The increase was mainly driven by the combined effect of higher realised prices and contributions from trading and optimisation, and gains related to the fair value accounting of commodity derivatives. This was partly offset by lower volumes and higher operating expenses. See “Integrated Gas”.

Upstream earnings in 2022 were $16,222 million, compared with $9,603 million in 2021. The increase was mainly driven by higher realised prices, gains relating to storage and working gas transfer effects and impairment reversals. This was partly offset by lower volumes, mainly as a result of divestments, and charges relating to the EU solidarity contribution and UK Energy Profits Levy. See “Upstream”.

Marketing earnings in 2022 were $2,133 million, compared with $3,535 million in 2021. The decrease was mainly driven by higher operating expenses (including the effects of higher volumes), net losses on the sale of assets compared with net gains in 2021, and higher impairment charges. These were partly offset by higher margins. See “Marketing”.

Chemicals and Products earnings in 2022 were $4,515 million, compared with $404 million in 2021. The increase was mainly driven by higher Products margins (reflecting higher Refining margins and higher contributions from trading and optimisation), and lower impairment charges. These were partly offset by lower Chemicals margins and higher operating expenses. See “Chemicals and Products”.

Renewables and Energy Solutions earnings in 2022 were a loss of $1,059 million, compared with a loss of $1,514 million in 2021. The decrease in the loss was mainly driven by higher contributions from trading and optimisation for gas and power. This was partly offset by higher net losses related to the fair value accounting of commodity derivatives and higher operating expenses. See “Renewables and Energy Solutions“.

Corporate segment earnings in 2022 were an expense of $2,461 million, compared with an expense of $2,606 million in 2021. The lower expense was mainly driven by favourable movements in net interest expense. This was partly offset by lower tax credits and unfavourable currency exchange effects. See “Corporate”.

Prior year earnings summary

Our earnings summary for the financial year ended December 31, 2021, compared with the financial year ended December 31, 2020, can be found in the Annual Report and Accounts (page 34) and Form 20-F (page 33) for the year ended December 31, 2021, as filed with the Registrar of Companies for England and Wales and the US Securities and Exchange Commission, respectively.

Production available for sale

Oil and gas production available for sale in 2022 was 2,864 thousand boe per day (boe/d), compared with 3,237 thousand boe/d in 2021. This net reduction was mainly driven by divestments, higher maintenance activities, and net field declines, partly offset by new fields ramp-ups.

Proved reserves

The proved oil and gas reserves of Shell subsidiaries and the Shell share of the proved oil and gas reserves of joint ventures and associates are summarised in “Oil and gas information” and set out in more detail in “Supplementary information – oil and gas (unaudited)”.

Before taking production into account, our proved reserves increased by 1,304 million boe in 2022. Total oil and gas production was 1,091 million boe. Accordingly, after taking production into account, our proved reserves increased by 213 million boe in 2022, to 9,578 million boe at December 31, 2022.

Cash capital expenditure and other information

Cash capital expenditure was $24,833 million in 2022, compared with $19,698 million in 2021.

Operating expenses were $39,477 million in 2022, compared with $35,964 million in 2021. Underlying operating expenses were $39,456 million, compared with $35,309 million in 2021.

Our return on average capital employed (ROACE) increased to 16.7%, compared with 8.8% in 2021, mainly driven by higher earnings.

Net debt was $44,837 million at the end of 2022, compared with $52,556 million at the end of 2021, mainly reflecting higher free cash flow.

Gearing was 18.9% at the end of 2022, compared with 23.1% at the end of 2021, mainly driven by net debt reduction and higher income which resulted in higher equity.

Significant accounting estimates and judgements

See Note 2 to the “Consolidated Financial Statements”.

Legal proceedings

See Note 31 to the “Consolidated Financial Statements”.