Big Oil is set to break annual profit records – sparking outcry from campaigners and activists
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The oil majors Exxon Mobil, ChevronBP, Shell and TotalEnergies are expected to report combined profit of $190 billion for 2022 when their final quarterly results are released in the coming days, according to analyst estimates compiled by Refinitiv.
Brimming with cash, the energy giants are expected to use their windfall profits to reward shareholders with higher dividends and share buybacks.
US President Joe Biden has previously accused oil companies of reaping a “boon from war“, while simultaneously refusing to help lower gas prices at the pump for American consumers. In June last year, Biden singled out Exxon Mobil for making “more money than God” .
Exxon Mobil spokeswoman Erin McGrath told CNBC that the rise in energy prices was “largely due to an imbalance between supply and demand” and that it was the company’s investments. company over the past five years that drive the quarterly results.
McGrath said Exxon sees its success “as an equation” and “an equation in which we can produce the energy and products that society needs – and – be a leader in reducing greenhouse gas emissions. of our own operations and also those of other companies”.
Spokespeople for BP and Shell declined to comment ahead of the annual results, while Chevron and TotalEnergies did not respond when contacted by CNBC.
In recent quarters, Big Oil executives have said the significant disruption to global energy markets due to the war in Ukraine has reaffirmed the importance of helping solve “the energy trilemma.” This, according to a statement to investors BP CEO Bernard Looney late last year referred to “secure, affordable, low-carbon energy”.
“They’re taking advantage of the current increase in oil and gas prices, and they’re betting on it. And what you’re seeing is actually an increase in oil and gas investment,” Agathe Bounfour told CNBC. , responsible for the oil campaign at the NGO Transport & Environment. by telephone.
“I think given that oil and gas prices are likely to stay high, it’s important for us to think about the fact that those profits are going to stay high at the same time that many households are struggling with oil prices. energy,” Bounfour said.
“There is no great interest [in] increase revenue and subsidize the industry at the same time,” she added.
“The Year the Empire Fought Back”
However, the push for green reform lost momentum last year.
The oil and gas industry has sought to underscore the importance of energy security amid calls for a rapid transition to renewables, generally pointing out that demand for fossil fuels remains high.
“I called 2022 the year the empire fought back,” Mark van Baal, founder of Dutch activist shareholder Follow This, told CNBC by phone.
“What we saw happening in 2022 was that the oil majors used high oil prices and the energy crisis to convince investors that the energy crisis should eclipse the climate crisis – and that caused a setback” , said van Baal.
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After ultimately failing with several climate resolutions in 2022, van Baal said it was clear from talks with the oil majors that they were once again determined to fend off pressure from activists and shareholders and get on with their core businesses. oil and gas.
“The attitude of the oil industry is ‘we have a very nice business model and we’re going to defend it tooth and nail,'” van Baal said. “The reason it’s so beautiful is because there are so many externalities that aren’t part of their costs – and, of course, the biggest one is the cost of climate change.”
Van Baal added: “My hope is not with the boards of these oil majors, my hope is that investors will realize that we don’t have time for another round of talks, another year. commitment and another year of benefit of the doubt.”
“Would harm both people and the planet”
Record profits from the biggest oil and gas majors in the West have also renewed calls for higher taxes, especially at a time when soaring gasoline and fuel prices have spurred inflation around the world.
Alice Harrison, head of the fossil fuels campaign at advocacy group Global Witness, said: “We all need to call out profiteers like this.”
She described the energy giants’ historic earnings as “shameful” given that “much of this money is earned at the expense of the millions of people who have been pushed into poverty by soaring oil prices. gas”.
“An increase in the windfall tax to help those struggling to pay their bills, along with a significant increase in renewable energy and home insulation, would end the era of fossil fuels that is harming so seriously to both people and the planet,” Harrison told CNBC via email.
Certainly, the burning of fossil fuels, such as coal, oil and gas, is the main driver of the climate emergency.