{"id":6435,"date":"2022-10-30T06:03:14","date_gmt":"2022-10-30T06:03:14","guid":{"rendered":"https:\/\/euromenaenergy.com\/?p=6435"},"modified":"2022-10-30T06:03:14","modified_gmt":"2022-10-30T06:03:14","slug":"oil-giants-face-backlash-for-handing-record-profits-to-investors","status":"publish","type":"post","link":"https:\/\/emimer.com\/?p=6435","title":{"rendered":"Oil giants face backlash for handing record profits to investors"},"content":{"rendered":"
\n

Bloomberg \/ New York<\/p>\n<\/div>\n

Big Oil\u2019s record profits are a huge hit on Wall Street but increasingly provocative in the corridors of power from Washington to London as politicians lash out against executives for funnelling windfall profits to investors.
\nThe controversy this week was not so much about the gargantuan dollar amounts earned but what the world\u2019s largest energy companies chose to do with them. Exxon Mobil Corp, Chevron Corp, Shell Plc and TotalEnergies SE are handing almost $100bn to shareholders annually in the form of buybacks and dividends while reinvesting just $80bn in their core businesses this year, according to data compiled by Bloomberg.
\n\u201cCan\u2019t believe I have to say this, but giving profits to shareholders is not the same as bringing prices down for American families,\u201d President Joe Biden tweeted on Friday in response to Exxon\u2019s dividend increase.
\nBiden assailed Exxon again Friday evening at a Democratic fundraiser in Philadelphia, saying the company\u2019s earnings were \u201cthe most it\u2019s made in its 152-year history, while the rest of America is struggling.\u201d
\n\u201cThose excess profits are going back to their shareholders and their executives instead of going to lower prices at the pump and giving relief to the American people, who deserve it and need it,\u201d he added.
\n\u201cI\u2019m going to keep harping on it,\u201d Biden vowed. \u201cThey talk about me picking on them – they ain\u2019t seen nothing yet. I mean it. It outrages me. Representative Ro Khanna, a California Democrat, called energy profits \u201cobscene,\u201d and introduced legislation to prohibit fuel exports, a move he said would lower prices at the pump. Senate Majority Leader Chuck Schumer called the earnings \u201cunconscionable.\u201d
\nRussia\u2019s post-invasion halt to natural gas shipments to much of Europe and sanctions on the country\u2019s oil exports triggered a global scramble for energy supplies, bidding up prices in the process.
\nWith gasoline prices and household utility bills squeezing consumers and pushing up inflation, politicians are demanding major oil companies reinvest more profits in drilling and refining to ease the strain.
\nFor their part, oil executives, under pressure on emissions and years of poor returns, are in no mood to back down.
\n\u201cThere are hard times, as we saw just two years ago where we had enormous losses,\u201d Chevron chief executive officer Mike Wirth said on Bloomberg TV. \u201cYou move into another part of the cycle and you have strong earnings. Good times don\u2019t last just like the difficult times don\u2019t last. We have to invest through those cycles.\u201d
\nWirth rejected the idea that current profits are a windfall and warned politicians against enacting any \u201cshort-sighted\u201d policies that would restrain investment.
\nEarlier this year, the UK passed a windfall-profits tax on domestic oil and gas producers including BP Plc and Shell to claw back some of their extraordinary earnings, and there may be more measures on the way. Prime Minister Rishi Sunak says all options are on the table as he attempts to fill a \u00a335bn ($40.7mn) budget shortfall.
\nThe European Union also gave a green light earlier this year for countries to implement windfall levies. An analysis from Boston Consulting Group found that the measure could raise as much as 150bn euros ($149mn) in the next year. \u201cThere\u2019s just a big gap in country finances and this is a way to fill that,\u201d said Anders Porsborg-Smith, a managing director at BCG. \u201cAnd it\u2019s rarely unpopular to tax supernormal profits.\u201d
\nCalifornia Governor Gavin Newsom, also a Democrat, said it\u2019s time to \u201ccrack down on oil\u2019s price gouging tactics and put their profits back into our pockets,\u201d adding \u201cgas prices shouldn\u2019t be this high.\u201d But analysts say California\u2019s strict clean-fuel standards are a major reason why the state pays more for gasoline than any other in the US.
\nWindfall taxes may be popular but whether they\u2019re effective is another matter. Shell hasn\u2019t had to pay any windfall tax in the UK so far, despite making record-setting profits this year, due to increased investment in the North Sea. More importantly, the industry says such taxes risks chilling investment by the oil majors at a time when they\u2019re most needed.
\nExxon and Chevron are increasing oil and gas output fast in the Permian Basin, and both reported strong refining throughput in the third quarter, but there\u2019s a limit to how much they can do to ease prices in the short-term. Major projects take years of planning and development. Bad policy is a factor behind today\u2019s energy crisis, according to Exxon CEO Darren Woods.
\n\u201cUnfortunately, the markets that we\u2019re in today are a function of many of the policies, and some of the narrative that\u2019s floated around in the past,\u201d he said. \u201cOur focus is really making sure people understand what the potential consequences of some of these policies are.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Bloomberg \/ New York Big Oil\u2019s record profits are a huge hit on Wall Street but increasingly provocative in the corridors of power from Washington to London as politicians lash out against…<\/p>\n","protected":false},"author":1,"featured_media":6436,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[40,46,48,50,57,68,76,77,78,79,80,82,86,87,88,90,95,96,98,99,103,107,109,111,112,114,121,123,137,139,146,148,153,159,174,176,181,182,184,187,196,201,202,203,209,217,221,222,229,231,232,233,239,241,244,246,249,250,251,252,256,262,263,266,268,277,279,280,283,285,288],"class_list":["post-6435","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oil-gas","tag-alleviation","tag-aramco","tag-athens","tag-athensenergydialogues","tag-baroudi","tag-carbon","tag-climate","tag-climate-change","tag-climateaction","tag-climatechange","tag-closure-of-nuclear","tag-co2","tag-cyprus","tag-decarbonising","tag-decarbonization","tag-democracy","tag-disputes","tag-doha","tag-east","tag-eastmed","tag-egypt","tag-embargo","tag-emissions","tag-energy","tag-energy-market","tag-energyindustry","tag-europe","tag-european-fuels","tag-gas","tag-gazprom","tag-greece","tag-greenenergy","tag-hydrocarbons","tag-international","tag-lebanon","tag-liquefied-natural-gas","tag-maritime","tag-maritime-boundaries","tag-maritime-disputes","tag-mediterranean","tag-natural-gas","tag-offshore","tag-oil","tag-oil-and-gas","tag-opec","tag-peace","tag-plants","tag-pollution","tag-poverty","tag-power","tag-putin","tag-qatar","tag-renewable-energy","tag-reserves","tag-rosneft","tag-roudi","tag-russia","tag-russia-in-the-european-energy-sector","tag-russian-gas","tag-russian-sanctions","tag-saudi","tag-solar","tag-solar-power","tag-straddling","tag-sustainability","tag-total","tag-trump","tag-turkey","tag-ukrain","tag-unclos","tag-usa"],"_links":{"self":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/6435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6435"}],"version-history":[{"count":0,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/6435\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/media\/6436"}],"wp:attachment":[{"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}