For the US group Exxon Mobil, things come together that others would rather describe as a contradiction. “Meeting the needs of the world – and reducing emissions at the same time,” is how the world’s second-largest oil company describes its current business. You could also say: The company is currently earning more than ever with fossil fuels, but also knows that these sources are finite.
Exxon Mobil presented the figures for the past year this Tuesday and it shows what was already clearly announced for all oil multinationals in autumn: It was a record year. In 2022, Exxon Mobil made $59 billion in profit, up 157 percent from the previous year. In purely mathematical terms, the company was making $6.7 million an hour. The group also surpassed its previous annual record of more than $45 billion in 2008. Since then, the group has reduced costs to become even more profitable. Earnings and cash flow are significantly higher than in the previous year, said CFO Kathy Mikells.
High demand, high prices
For the world, 2022 was above all a year of crisis: Russia invaded Ukraine, natural gas deliveries from Russia to Europe were stopped, the demand for alternative and fast energy supplies – from the USA, for example – is massive. Many countries, including Germany, will continue to rely on fossil fuels in the medium term. The consequences are still comparatively high oil and gas prices. The corporations also generate good profits in the refinery business, where crude oil is processed into petrol, for example. The big energy companies BP, Shell and Total are all set to report their annual earnings in the coming days. Experts expect that, together with Exxon Mobil and Chevron, they should come up to almost $200 billion.
Many consider it immoral that companies are making so much money because of the world situation. Critics therefore speak of crisis or chance profits. States have already introduced corresponding taxes on part of the profits. In the EU, too, member states must demand a corresponding fee. Exxon Mobil has filed a lawsuit against the new tax in the EU. In the fourth quarter, the tax cost him $1.3 billion. Treasury chief Mikells said an excess profits tax was “bad policy”.
The oil companies also pay part of the income to their shareholders. Exxon Mobil, for example, paid about $15 billion in dividends in 2022. The company also plans to buy back $50 billion worth of stock by 2024. In this way, the demand for the paper increases, and so does the price.
The US government is demanding that companies invest in energy projects. In November and shortly before the midterm elections, US President Joe Biden threatened: “The oil industry has a choice” – either it lowers prices at the pump or pays a higher tax on excessive profits. So far it has remained with the threats. In addition, the US government supports the expansion of future technologies and domestic industry with the help of the Inflation Reduction Act. Exxon plans to invest more in clean energies like hydrogen and biofuels, but it also wants to produce more oil. The attitude to the subsidy program: correct, but far from sufficient.