Rising earnings

Profits surge may see oil firms lift dividends

Shell is among the oil majors making huge profits (pic: Terry Murden)

Oil and gas companies are expected to raise dividends and possibly accelerate share purchases following another strong quarter. 

Shell, BP, TotalEnergies, Exxon, and Chevron will report second quarter figures that could hit new records amid soaring commodity prices and high refining margins. 

Some have already guided towards blockbuster earnings even higher than the first quarter.

At Shell, the refining margin nearly tripled in Q2 compared to Q1 and is expected to add between $800 million and $1.2 billion to the second quarter results of Shell’s Products division compared to the first quarter of 2022.  

Together with BP and TotalEnergies it is expected to boost share repurchases.

One analyst told Reuters that “based on a $70 long-term oil price, we see significant potential for Shell to increase its dividend and guide towards longer-term dividend growth”.

BP could also bump up its dividend by 4% or possibly more, HSBC analysts have told the agency. 

The surge in earnings has been a target of campaigners and politicians demanding higher taxes to help meet the cost of living rises felt by households and other businesses.

Former Chancellor Rishi Sunak has introduced an energy profits levy, otherwise known as a windfall tax, amid calls for oil and gas companies to increase investment in the North Sea. The companies say such taxes are only likely to deter investment.

In the US, President Joe Biden wants oil companies to pass on profits to consumers.

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