Financial intricacies surrounding Shell’s expansive oil and gas trading arm have long remained veiled in secrecy. However, a legal battle initiated by a former employee has involuntarily peeled back the curtain, exposing the company’s staggering earnings from its U.S. crude trading ventures.
In documents presented during a lawsuit in a Texas state court, it emerged that Shell’s U.S. crude trading division consistently rakes in approximately $1 billion in profits annually.
Testimony from John Dimech, a former head of Shell’s U.S. crude trading division, offered a rare glimpse into the substantial profits generated by the trading operations, alongside the hefty bonuses awarded to traders.
Dimech, who served as a manager in Shell’s Houston-based crude oil trading group for over a decade, revealed in a deposition last year that the unit typically netted between $950 million to $1 billion annually. Remarkably, this constitutes around 13% to 15% of Shell’s overall pre-tax profits in the United States, as per calculations derived from company filings.
Despite Shell’s silence on the matter, industry analysts stress the significance of disclosing the financial performance of its oil and gas trading desk, considered the largest in the world. The opacity surrounding this aspect of Shell’s business has raised concerns among investors, despite the potential for substantial profits, given the volatile nature of trading, which can sometimes lead to losses.
Traders within Shell’s ranks capitalize on global disparities in oil and gas supply and demand to secure profits through strategic buying and selling. Their compensation often includes hefty bonuses tied to their performance, which can exceed the annual bonuses of top executives, including CEO Wael Sawan.
The legal saga unfolded when former trading manager Eva-Maria Frohn lodged a breach of contract claim against Shell, seeking a substantial sum, including a $6 million bonus for 2021. Frohn contended that a proposed job transfer would result in diminished earnings, rendering her redundant. However, Shell rebutted, asserting that her refusal of the job transfer amounted to resignation.
Last Tuesday, a jury delivered a verdict in favour of Shell, dismissing Frohn’s claim entirely. The outcome marked a victory for Shell, as affirmed by the law firm representing the company, while Frohn’s attorney remained unavailable for comment.
Follow us on:
The EFCC has arrested three suspects for alleged vote buying during the ongoing Edo governorship…
Evacuations of 30,000 people are underway in central Japan as heavy rains threaten severe flooding,…
An employee of California's state fire protection agency, known as Cal Fire, has been arrested…
In Mexico's western Sinaloa state, at least 53 people have been killed and 51 others…
The Nigeria Police Force (NPF) has announced the arrest of two suspected political thugs during…
President Bola Tinubu on Saturday rejoiced with his better half, Oluremi Tinubu, on the occasion…