Shell Reports 16% Profit Drop in 2024 Amid Rising Costs and Falling Oil Prices

Shell, the British oil giant, has revealed concerning statistics indicating a net profit of $23.716 billion for 2024, marking a 16% decline year-on-year when excluding inventory valuation changes and non-recurring items. This decline signifies the company's profits have now dropped for two consecutive years, primarily influenced by rising exploration costs and decreasing oil prices.

Breaking down the profit by business segments, the chemical products division reported a net profit of $2.934 billion, reflecting a 19% decrease compared to last year. The natural gas sector also experienced an 18% decline, while the upstream exploration and production sectors saw profits fall by 14%. Notably, the renewable energy solutions department faced a loss of $497 million, a significant drop from a profit of $756 million a year earlier. Overall, the company's net losses across its departments amounted to $1.968 billion, although this is an improvement from last year’s loss of $2.875 billion. In contrast, profits from electric vehicle charging services and lubricant marketing rose by 17% year-on-year.

In terms of production, Shell reported an upstream oil and gas output of 1.831 million barrels of oil equivalent per day, which is a 2% increase from the previous year. Combined with the natural gas sector, the total output reached 2.836 million barrels of oil equivalent per day, also a 2% rise. Looking ahead, Shell forecasts that the natural gas division's output will range between 930,000 to 990,000 barrels of oil equivalent per day in the first quarter of 2025, while upstream oil and gas production is expected to fall between 1.75 million and 1.95 million barrels of oil equivalent per day.