Earnings
Earnings 2022-2021
Upstream earnings in 2022 were $16,222 million, compared with $9,603 million in 2021. The increase was mainly driven by higher realised oil and gas prices and a gain related 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 related to the EU solidarity contribution and UK Energy Profits Levy.
Full year 2022 segment earnings included a gain from net impairment reversals of $853 million and charges of $1,385 million relating to EU solidarity contributions and $802 million relating to the UK Energy Profits Levy. These gains and losses are part of identified items and compare with the full year 2021, which included a net gain of $3,261 million related to the sale of assets (mainly related to the sale of the Permian business in the USA), partly offset by impairment charges of $633 million, losses of $393 million for the fair value accounting of commodity derivatives, and legal provisions of $287 million.
Adjusted Earnings and Adjusted EBITDA were driven by the same factors as the segment earnings and adjusted for identified items.
Earnings 2021-2020
Upstream earnings in 2021 were a profit of $9,603 million, compared with a loss of $9,300 million in 2020. Earnings were helped by higher oil and gas prices, mainly driven by the improved macroeconomic conditions and the one-off release of a tax provision in Nigeria and lower depreciation, partly offset by lower production volumes.
Full year 2021 segment earnings included a net gain of $3,261 million related to the sale of assets (mainly related to the sale of the Permian business in the USA), partly offset by impairment charges of $633 million, losses of $393 million for the fair value accounting of commodity derivatives, and legal provisions of $287 million. These gains and losses are part of identified items, and compare with the full year 2020 segment earnings which included a net charge of $5,387 million related to impairments, primarily in the US Gulf of Mexico, unconventional assets in North America, offshore assets in Brazil and Europe, and a project in Nigeria (OPL245), mainly triggered by revision of Shell’s mid- and long-term commodity price and updated Appomattox subsurface understanding. Also included was a net charge of $782 million related to the impact of the weakening Brazilian real on a deferred tax position.
Adjusted Earnings and Adjusted EBITDA were driven by the same factors as the segment earnings and adjusted for identified items.
