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SHELL EARNS $1 BILLION A YEAR FROM US CRUDE TRADING, COURT FILING SHOWS

By Arathy Somasekhar and Ron Bousso
April 29, 20249:14 PM GMT+2Updated 2 days ago
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A view shows a logo of Shell petrol station in South East London, Britain,
February 2, 2023. REUTERS/May James/File Photo Purchase Licensing RightsNew Tab,
opens new tab
 * Companies

 * Company
   Shell PLC
   Follow

HOUSTON, April 29 (Reuters) - Financial details of Shell's (SHEL.L)New Tab,
opens new tab vast oil and gas trading business are some of the company's
closest-held secrets. Documents in a lawsuit filed by a former employee,
however, revealed its U.S. crude trading regularly earns around $1 billion every
year.
Testimony by a former head of Shell's U.S. crude trading division filed in a
Texas state court has offered a rare look at the huge profits of its trading
operations and the multi-million dollar bonuses bestowed on traders.
Advertisement · Scroll to continue

John Dimech, who was a manager in Shell's crude oil trading group in Houston for
11 years, said in a deposition last year that the crude trading unit typically
made between $950 million to $1 billion a year.
That is between 13% and 15% of Shell's overall U.S. pre-tax profits in recent
years, according to calculations based on company filings.
Shell's 2022 tax contribution report detailed a pre-tax profit of just over $7
billion total in the U.S. that year, while its 2021 pretax profit stood at about
$6.36 billion.
Advertisement · Scroll to continue

A Shell spokesperson declined to comment.
The British oil major does not disclose the financial performance of its oil and
gas trading desk, the world's largest, although the lack of information worries
some investors. The business can generate bumper profits, but can be volatile
and even post losses.
Traders make money by buying and selling oil and gas using gaps in supply and
demand around the world to lock in profits. Their pay often includes promises of
large bonuses based on their performance, that can be more than CEO Wael Sawan's
annual bonus, which was 2.7 million pounds ($3.4 million) last year, according
to the latest annual report.

In the Houston court filing, Shell denied a breach of contract claim by former
trading manager Eva-Maria Frohn, who sought $15 million, including $6 million
for 2021's bonus. She received a more than $5 million bonus in 2020 for her work
the previous year.
Frohn claimed that a job transfer she was offered would not be as lucrative as
the job she held, making her redundant, while Shell maintained that her job
rejection amounted to a resignation.
Advertisement · Scroll to continue

A jury last Tuesday rendered a verdict favorable to Shell, nullifying Frohn's
entire claim against Shell, accordingNew Tab, opens new tab to the law firm that
represented the company.
Frohn's attorney did not reply to a request for comment.
($1 = 0.8005 pounds)

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Reporting by Arathy Somasekhar in Houston and Ron Bousso in London; Editing by
Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles.New Tab, opens new tab

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Purchase Licensing Rights
Arathy Somasekhar

Thomson Reuters

Houston-based energy reporter focused on oil markets and energy companies.
Arathy closely tracks U.S. crude supply and its impact on global markets, ever
changing crude oil flows, and reports on U.S. shale producers and oilfield
service companies.

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Ron Bousso

Thomson Reuters

Ron has covered since 2014 the world’s top oil and gas companies, focusing on
their efforts to shift into renewables and low carbon energy and the sector's
turmoil during the COVID-19 pandemic and following Russia's invasion of Ukraine.
He has been named Reporter of the Year in 2014 and 2021 by Reuters. Before
Reuters, Ron reported on equity markets in New York in the aftermath of the 2008
financial crisis after covering conflict and diplomacy in the Middle East for
AFP out of Israel.

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