Indignation, incomprehension. The tone is rising everywhere, even if the ideological and demagogic postures contribute to fueling the controversies. Never have Western oil companies made so much money. For the year 2022, they should post some 200 billion dollars (180 billion euros) in profits, half of which will be made by the two American majors, ExxonMobil and Chevron.
With a net profit of 55.7 billion dollars (51 billion euros) last year, ExxonMobil even smashes the record it had recorded in 2008, when a barrel of oil sold for 142 dollars, or 30% higher than last year’s average.
US oil production nears new record
Proof that the cost reduction programs launched during the pandemic have borne fruit and boosted the profitability of companies. This is the first reason for their excellent health today. In addition, there are three others: prices have remained high due to OPEC’s decision to limit its supply, the economic recovery has increased demand for gas and oil and the fall in Russian hydrocarbon exports has opened up new market prospects to Western majors.
In 2022, the United States produced almost 12 million barrels per day (Mb/d), i.e. 760,000 Mb/d more than in 2021 and 12.6 million could be reached in 2023, which would constitute a new record for the country (after 12.3 Mb/d in 2019).
Historical profits for TotalEnergies
Chevron thus recorded a doubling of its profits (35.5 billion dollars, or 32.4 billion euros), just like the British Shell, which made its biggest profits in 130 years of history.
TotalEnergies is not left out. Its results, published on Wednesday February 8, should exceed 20 billion dollars (18.3 billion euros), a historic level and even probably the largest ever achieved by a French company. The announcement should trigger a torrent of reactions and new calls for the taxation of these ” superprofits ».
Even in the United States, criticism is increasing. Exxon’s record profits are “scandalous”especially after “the American people have been forced to pay such high prices at the pumps” following the Russian invasion of Ukraine, explained a White House spokesperson to the BBC on Wednesday February 1.
Climate, dividends and share buybacks
In London, Greenpeace activists demonstrated outside Shell’s headquarters on Thursday, February 2, during the presentation of the results. “Shell benefits from climate destruction and immense human suffering”, denounced the NGO in a press release. She asks world leaders to “ force historic mega-polluters to fuel” a fund “for loss and damage caused by the climate crisis”.
Oil companies are also criticized for giving too much to their shareholders, in the form of dividends and share buybacks, and for not investing enough in renewables.
Chevron has, for example, just unveiled a 75 billion dollar (69 billion euro) share buyback program, one of the biggest ever launched. In December 2022, ExxonMobil announced that it was going to increase its share buyback plan from 30 to 50 billion dollars (27 to 47 billion euros). This is proof, say its detractors, that the group does not know where to reinvest its money and prefers to return it to its shareholders.
TotalEnergies seeks to clear the land
At the French oil company, it is the commotion in the face of the controversies that are coming. “ I understand that our superprofits anger public opinion… I understand that there is a societal, collective, complicated subject here “, explained its CEO, Patrick Pouyanné, in a major interview with the Belgian daily. Echo, published on Saturday January 28, recalling that his group pays “ more than 30 billion in taxes in the world making it one of the ” 10 biggest contributors “. In Europe (including Great Britain), the additional taxes decided last year will cost it 3 billion more.
TotalEnergies also announced on Thursday, February 2, that it had increased the overall package of salary increases for 2023 previously negotiated with the unions, in order to take inflation into account. It provides for an average increase of 7.5% instead of 7%. The budget for bonuses for non-executive employees will be increased by 15%. Same for the frames.
It is not sure, despite everything, that this calms the grumbling. Even though a threat of blocking refineries to protest against the pension reform still hangs.