U.S. President Joe Biden has previously singled out Exxon Mobil for making “more money than God” last year.
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Some of the world’s largest oil and gas companies are poised to report record annual profits, raking in extraordinary revenues following a year of volatile fossil fuel prices amid Russia’s onslaught in Ukraine.
Oil majors Exxon Mobil, Chevron, BP, Shell and TotalEnergies are slated to report a combined profit of $190 billion for 2022 when their final quarterly results are released in the coming days, according to estimates from analysts collated by Refinitiv.
Flush with cash, the energy giants are expected to use their windfall profits to reward shareholders with higher dividends and share buybacks.
U.S. President Joe Biden has previously accused oil companies of reaping a “windfall of 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 spokesperson Erin McGrath told CNBC higher energy prices are “largely as a result of a supply-demand imbalance” and that it is the firm’s investments over the last five years that are driving quarterly results.
McGrath said Exxon sees its success “as an ‘and’ equation, one in which we can produce the energy and products society needs — and — be a leader in reducing greenhouse gas emissions from our own operations and also those from other companies.”
Spokespeople for BP and Shell did not wish to comment ahead of full-year 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 to solve “the energy trilemma.” This, according to a statement to investors from BP CEO Bernard Looney late last year, refers to “secure, affordable and lower carbon energy.”
“They are profiting from the current increase in oil and gas prices, and they are betting on it. And what you see is actually increased investment in oil and gas,” Agathe Bounfour, oil campaign lead at the NGO Transport & Environment, told CNBC via telephone.
“I think given that prices of oil and gas are likely to stay up, it’s important for us to reflect on the fact that these profits are going to stay high at the same time as many households are struggling with energy prices,” Bounfour said.
“There’s not much point [in] raising revenues and subsidizing the industry at the same time,” she added.
The Big Oil profits are seen from within the industry as something of a vindication. The energy giants came under immense pressure from shareholders and activists to invest in clean energy as oil demand cratered in the peak of 2020 lockdowns.
The push toward green reform lost momentum last year, however.
The oil and gas industry has sought to underline the importance of energy security amid calls for a rapid transition to renewables, typically highlighting that demand for fossil fuels remains high.
“I have called 2022 the year the empire struck back,” Mark van Baal, founder of Dutch shareholder activist Follow This, told CNBC via telephone.
“What we saw happening in 2022 is that the oil majors used the high oil prices and the energy crisis to convince investors that the energy crisis should eclipse the climate crisis — and that has caused a setback,” van Baal said.
The logo of Shell on an oil storage silo, beyond railway tanker wagons at the company’s Pernis refinery in Rotterdam, Netherlands, on Sunday, Oct. 23, 2022.
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After ultimately failing with several climate resolutions in 2022, van Baal said it was clear from discussions with oil majors that they were once again determined to fend off activist and shareholder pressure and continue with their core oil and gas businesses.
“The attitude of the oil industry is ‘we have a very handsome business model and we’re going to defend it tooth and nail,'” van Baal said. “The reason it is so handsome is because there are so many externalities not inside 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 the investors will realize that we don’t have time for another round of discussion, another year of engagement and another year of the benefit of the doubt.”
Record earnings from the West’s largest oil and gas majors have also renewed calls for higher taxes, particularly at a time when surging gas and fuel prices have boosted inflation around the world.
Alice Harrison, fossil fuels campaign leader at advocacy group Global Witness, said, “We must all call out profiteering like this.”
She described the historic revenues for energy giants as “disgraceful” given that “much of this money is being made at the expense of the millions of people who have been pushed into poverty because of the skyrocketing cost of gas.”
“An increased windfall tax to help those struggling to pay their bills, along with a significant boost in renewable energy and home insulation, would end the fossil fuel era that is harming both people and the planet so severely,” Harrison told CNBC via email.
To be sure, burning fossil fuels, such as coal, oil and gas, is the chief driver of the climate emergency.