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Shell’s U.S. Crude Trading Division Rakes in Approximately $1 Billion Annually, Court Documents Reveal

Financial particulars surrounding Shell’s expansive oil and gas trading enterprise have long remained closely guarded. However, revelations stemming from a lawsuit filed by a former employee have unveiled that its U.S. crude trading arm consistently generates around $1 billion in annual revenue.

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Testimony provided by a former head of Shell’s U.S. crude trading division, filed in a Texas state court, has provided a rare glimpse into the substantial profits generated by its trading activities, as well as the substantial bonuses awarded to traders.

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John Dimech, who served as a manager within Shell’s crude oil trading division in Houston for 11 years, indicated in a deposition last year that the crude trading unit typically yielded between $950 million to $1 billion annually.

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These figures account for approximately 13% to 15% of Shell’s overall pre-tax profits in the United States in recent years, as per calculations derived from company filings.

According to Shell’s 2022 tax contribution report, the company reported a pre-tax profit of slightly over $7 billion in the U.S. for that year, while its 2021 pre-tax profit stood at approximately $6.36 billion.

When approached for comment, a Shell spokesperson declined to provide a statement.

The British oil giant refrains from divulging the financial performance of its oil and gas trading desk, which stands as the world’s largest. Nonetheless, the absence of such information raises concerns among certain investors. Although the trading business can yield substantial profits, it also carries inherent volatility and the potential for losses.

Traders within Shell profit by engaging in the buying and selling of oil and gas commodities, capitalizing on discrepancies in global supply and demand to secure profits. Their compensation often includes significant bonuses contingent upon their performance, which can surpass the annual bonus received by CEO Wael Sawan, amounting to 2.7 million pounds ($3.4 million) last year, as per the company’s latest annual report.

Within the context of the Houston court filing, Shell rebuffed a breach of contract allegation put forth by former trading manager Eva-Maria Frohn, who sought $15 million, inclusive of a $6 million bonus for 2021. In 2020, she received a bonus exceeding $5 million for her preceding year’s contributions.

Frohn contended that a job transfer offered to her would not be as financially rewarding as her existing role, rendering her position redundant. Conversely, Shell asserted that her refusal of the job transfer amounted to a resignation.

A jury ruling last Tuesday favored Shell, effectively nullifying Frohn’s entire claim against the company, according to the law firm representing Shell.

Frohn’s legal representative did not respond to requests for comment.

(1 British pound = 0.8005 U.S. dollars)

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