Status: 02/09/2023 08:09 a.m
Despite the climate crisis and inflation, oil companies are doing better than ever. While consumers suffer from high prices for heating or fuel, the oil industry made record profits last year.
The oil multinationals are earning more than ever thanks to higher gas and oil prices. Since the outbreak of the war of aggression against Ukraine, the Western world has been boycotting some Russian gas and oil and has had to quickly find new sources of energy. For fear of supply gaps, the issue of climate protection moved into the background.
Total achieves record results in 2022
French energy group TotalEnergies posted a 28 percent increase in profits to $20.5 billion last year — despite billions in write-downs for the exit from a Russian gas company, which weighed on results in the final quarter, the company said on Wednesday.
Adjusted for special effects, the energy giant doubled its profits to a record $36.2 billion. The Management Board announced a surprisingly high final dividend of EUR 0.74, increasing the regular payout to EUR 2.81. In addition, TotalEnergies is planning a share buyback with a volume of two billion dollars in the current first quarter.
Europe’s oil companies with a profit – climate targets adjusted
Thanks to a booming gas business, the energy group Shell 2022 achieved the best business result in its history. Profits doubled from the previous year to nearly $40 billion. And the British oil multinational BP more than doubled its profit last year to around 28 billion US dollars.
Due to high demand for oil and gas, BP even corrected its climate targets – downwards: The group only wants to reduce its oil production by 25 percent by 2030 compared to the previous year. Previously, 40 percent had been announced. So far, BP has been one of the pioneers in the energy sector with its climate protection goals.
Also US oil multinationals with record profits
The largest US oil company Exxon made a net profit of almost 56 billion dollars in 2022 – around 140 percent more than in the previous year and the highest result in the company’s more than 140-year history. Chevron also made a profit of 35.5 billion US dollars, more than twice as much as in the previous year.
Not only increased prices ensured mega profits
Experts estimate that Exxon, Chevron, BP, Shell and Total made a combined profit of around $190 billion last year. Higher oil and gas prices are not the only reason for the mega profits, according to University of Massachusetts economist Isabella Weber. Another important factor is low production costs.
The industry has shut down expensive production facilities due to the slump in demand during the pandemic and has not yet put them back into full operation – although the economic recovery from the Corona crisis has increased global oil demand again and limited supply due to the Ukraine war and sanctions against Russia had been.
International criticism of profits
The fact that in times of high inflation, but also global warming and climate crises the oil and raw materials sector is swimming in money, causes international criticism. US President Biden described the profit increases as “outrageous” in his State of the Union address and called for higher taxes on share buybacks.
In France, the total result has rekindled the debate about how to deal with such special profits. Trade unions and environmentalists accused TotalEnergies of enriching itself at the expense of the environment and at the same time hardly allowing the workforce to share in the profits.
TotalEnergies specifically referred to discounts on fuel prices it had given to French motorists last year. CEO Patrick Pouyanné promised further such measures.
German consumer advocates are also calling for intervention
In Germany, too, consumer advocates are calling for political intervention: “Exorbitant profits must be banned by the legislature,” said Leonora Holling, chairwoman of the Association of Energy Consumers, of the “Neue Osnabrücker Zeitung”.
The left-wing co-chairman Martin Schirdewan criticized the fact that the federal government had contributed to the high profits of the oil companies with its tank discount in the summer. The planned skimming off of surplus profits, on the other hand, is too low and comes too late.
The EU had already decided in September to impose a so-called excess profit tax on the spectacular profits made by energy companies. The money is to be used to finance relief for citizens and companies. Exxon has already announced that it will legally challenge the tax.