Big Oil’s record profits are a hit with Wall Street, but increasingly provocative in the corridors of power from Washington to London as politicians lash out against executives for giving windfall profits to investors.
The controversy this week was not so much about the dollar amounts earned, but what the world’s largest energy companies chose to do with them.
Exxon, Chevron, Shell and TotalEnergies are handing almost $100 billion to shareholders annually in the form of buy-backs and dividends, while reinvesting $80bn in their core businesses this year, according to data compiled by Bloomberg.
“Can’t believe I have to say this, but giving profits to shareholders is not the same as bringing prices down for American families,” President US Joe Biden tweeted on Friday in response to Exxon’s dividend increase.
Mr Biden assailed Exxon again on Friday evening at a Democratic fund-raiser in Philadelphia, saying the company’s earnings were “the most it’s made in its 152-year history, while the rest of America is struggling”.
“Those 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,” he said.
“I’m going to keep harping on it,” Mr Biden said. “They talk about me picking on them — they ain’t seen nothing yet. I mean it. It outrages me.”
Russia’s post-invasion halt to natural gas shipments to much of Europe and sanctions on the country’s oil exports triggered a rush for energy supplies, bidding up prices in the process.
With petrol 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.
For their part, oil executives, under pressure on emissions and years of poor returns, are in no mood to back down.
“There are hard times, as we saw just two years ago where we had enormous losses,” Chevron chief executive Mike Wirth said on Bloomberg TV.
“You move into another part of the cycle and you have strong earnings. Good times don’t last just like the difficult times don’t last. We have to invest through those cycles.”
Mr Wirth rejected the idea that current profits are a windfall and warned politicians against enacting any “short-sighted” policies that would restrain investment.
“Typically if you want less of something, you tax it,” he said.
This year, the UK passed a windfall profits tax on domestic oil and gas producers, including BP 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 £35bn ($40.7 million) budget shortfall.
The European Union also approved windfall levies. An analysis from Boston Consulting Group found that the measure could raise as much as €150bn ($149m) in the next year.
“There’s just a big gap in country finances and this is a way to fill that,” said Anders Porsborg-Smith, a managing director at BCG. “And it’s rarely unpopular to tax supernormal profits.”
Windfall taxes may be popular, but whether they are effective is another matter.
Shell has not 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 said such taxes risks chilling investment by the oil majors at a time when they are most needed.
Exxon 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 is 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’s energy crisis, according to Exxon chief executive Darren Woods.
“Unfortunately, the markets that we’re in today are a function of many of the policies, and some of the narrative that’s floated around in the past,” he said.
“Our focus is really making sure people understand what the potential consequences of some of these policies are.”
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
The%C2%A0specs%20
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E4.4-litre%2C%20twin-turbo%20V8%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3Eeight-speed%20auto%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E617hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E750Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3Efrom%20Dh630%2C000%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
Mohammed bin Zayed Majlis
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
More from Rashmee Roshan Lall
KILLING OF QASSEM SULEIMANI
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Clinicy%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Prince%20Mohammed%20Bin%20Abdulrahman%2C%20Abdullah%20bin%20Sulaiman%20Alobaid%20and%20Saud%20bin%20Sulaiman%20Alobaid%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Riyadh%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2025%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20HealthTech%3Cbr%3E%3Cstrong%3ETotal%20funding%20raised%3A%3C%2Fstrong%3E%20More%20than%20%2410%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Middle%20East%20Venture%20Partners%2C%20Gate%20Capital%2C%20Kafou%20Group%20and%20Fadeed%20Investment%3C%2Fp%3E%0A
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Company Profile
Company name: Yeepeey
Started: Soft launch in November, 2020
Founders: Sagar Chandiramani, Jatin Sharma and Monish Chandiramani
Based: Dubai
Industry: E-grocery
Initial investment: $150,000
Future plan: Raise $1.5m and enter Saudi Arabia next year
UAE currency: the story behind the money in your pockets
Reputation
Taylor Swift
(Big Machine Records)
The specs: 2019 Audi A8
Price From Dh390,000
Engine 3.0L V6 turbo
Gearbox Eight-speed automatic
Power 345hp @ 5,000rpm
Torque 500Nm @ 1,370rpm
Fuel economy, combined 7.5L / 100km
Ireland v Denmark: The last two years
Denmark 1-1 Ireland
7/06/19, Euro 2020 qualifier
Denmark 0-0 Ireland
19/11/2018, Nations League
Ireland 0-0 Denmark
13/10/2018, Nations League
Ireland 1 Denmark 5
14/11/2017, World Cup qualifier
Denmark 0-0 Ireland
11/11/2017, World Cup qualifier
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
India squad for fourth and fifth Tests
Kohli (c), Dhawan, Rahul, Shaw, Pujara, Rahane (vc), Karun, Karthik (wk), Pant (wk), Ashwin, Jadeja, Pandya, Ishant, Shami, Umesh, Bumrah, Thakur, Vihari
Disability on screen
Empire — neuromuscular disease myasthenia gravis; bipolar disorder; post-traumatic stress disorder (PTSD)
Rosewood and Transparent — heart issues
24: Legacy — PTSD;
Superstore and NCIS: New Orleans — wheelchair-bound
Taken and This Is Us — cancer
Trial & Error — cognitive disorder prosopagnosia (facial blindness and dyslexia)
Grey’s Anatomy — prosthetic leg
Scorpion — obsessive compulsive disorder and anxiety
Switched at Birth — deafness
One Mississippi, Wentworth and Transparent — double mastectomy
Dragons — double amputee
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
DUBAI WORLD CUP CARNIVAL CARD
6.30pm Handicap US$135,000 (Turf) 2,410m
7.05pm UAE 1000 Guineas Listed $250,000 (Dirt) 1,600m
7.40pm Dubai Dash Listed $175,000 (T) 1,000m
8.15pm Al Bastakiya Trial Conditions $100,000 (D) 1.900m
8.50pm Al Fahidi Fort Group Two $250,000 (T) 1,400m
9.25pm Handicap $135,000 (D) 2,000m
The National selections
6.30pm: Gifts Of Gold
7.05pm Final Song
7.40pm Equilateral
8.15pm Dark Of Night
8.50pm Mythical Magic
9.25pm Franz Kafka
The specs
Engine: 3.0-litre 6-cyl turbo
Power: 374hp at 5,500-6,500rpm
Torque: 500Nm from 1,900-5,000rpm
Transmission: 8-speed auto
Fuel consumption: 8.5L/100km
Price: from Dh285,000
On sale: from January 2022
Global state-owned investor ranking by size
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1.
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United States
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2.
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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6.
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Canada
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7.
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Singapore
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8.
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Australia
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9.
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Saudi Arabia
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10.
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South Korea
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LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
