The American hydrocarbon giants ExxonMobil and Chevron, in the crosshairs of the Biden government, which accuses them of not making enough efforts to limit the surge in prices at the pump, generated record profits in the second quarter.
With crude prices soaring to over US$100 in the wake of Russia’s invasion of Ukraine — and juicy refinery margins — ExxonMobil earned $17.9 billion over the period. , and Chevron, 11.6 billion.
These American giants are not the only ones to take advantage of the situation: in Europe, Shell generated a net profit of 18 billion, TotalEnergies, 5.7 billion, and Eni, 3.8 billion. The Spanish Repsol has seen its profits grow by 165% since January.
Imperial Oil, a Canadian subsidiary of Exxon, posted a sharp rise in profit for its most recent quarter on Friday, supported by higher energy prices and production growth. The Calgary-based company posted a net profit of C$2.41 billion (or $3.63 per share), more than six times higher than in the second quarter of 2021, which was C$366 million (or 50 cents per share). Total revenue and other income for the quarter ended June 30 reached $17.31 billion, compared with $8.1 billion for the same quarter a year earlier.
Prices catapulted
A barrel of black gold listed in New York traded over the period between approximately US$95 and US$120. Rising for more than a year due to rebounding business and consumer demand, its price jumped in the spring to levels not seen since 2008, with the sanctions imposed on Russia after the invasion of Ukraine. .
This surge contributes largely to inflation, which is at its highest for several decades in the United States and Europe. The US government regularly criticizes companies in the sector for enriching themselves on the backs of motorists without bothering to try to solve the problem, with President Joe Biden even joking in early June that ExxonMobil was going to “earn more money than God” in the second quarter.
On the production side, ExxonMobil points out that it pumped around 130,000 barrels of oil equivalent per day more during the quarter in the Permian basin, which straddles Texas and New Mexico, while that of Chevron increased by 3 % in the country.
And ExxonMobil assures that its refining capacity will be increased by about 250,000 barrels per day in the first quarter of 2023, “which represents the largest capacity addition in the industry in the United States since 2012”, underlined its p .-CEO, Darren Woods, in a statement.
On the refinery side, the situation is more mixed. The volumes processed by ExxonMobil in the United States increased slightly, but those processed by Chevron fell by 8% due to maintenance operations.
Spoiled shareholders
Overall, ExxonMobil’s revenue rose 71% to nearly $115.7 billion, and Chevron’s revenue rose 83% to $69 billion. Both companies benefited from the sharp rise in the price of refined products, which boosted their margins, from the increase in crude production and from controlling their expenses.
ExxonMobil and Chevron are taking advantage of this to reduce their level of indebtedness and spoil their shareholders: ExxonMobil paid them 7.6 billion in total over the quarter, while Chevron increased the upper range of its program from 10 to 15 billion. repurchase of shares for the year.
Taxing excess profits?
On the one hand, consumers strangled by gas and electricity bills; on the other, companies juggling with billions: part of Europe has resolved to tax the exceptional profits of certain large groups, in particular in the energy sector.
At the same time, soaring prices are plunging millions of households into precariousness and causing States to spend considerable sums. The OECD has estimated $169 billion in direct support from its member states and some partners for fossil fuel consumption disbursed between October 2021 and the end of 2022.
“These companies are not making extra profits because they have invested, but because of the war,” explains Jacob Kirkegaard, a member of the Brussels think tank German Marshall Fund. “Governments do not consider it politically acceptable for these groups to make so much money while everyone else is suffering. »
Last to date, Spain announced in mid-July a tax on the extraordinary profits of large energy and financial companies which could bring in some 3.5 billion euros per year over two years.
Earlier, London unveiled a 25% tax on profits for oil and gas giants at the end of May, which is expected to raise five billion pounds. A rate similar to that of Italy. Romania and Greece have also imposed measures affecting groups in the energy sector.
This exceptional taxation affecting energy producers has also received some unusual support, such as the OECD, the European Commission and the International Energy Agency, to varying degrees.
With The Canadian Press