Oil companies are raking in the cash while a global financial crisis and energy crisis cripple the country. Economies are facing the prospect of another deep recession, but oil companies are reaping record profits.
BP became the latest this week in the procession to post bumper results, showcasing its best quarter since record earnings in 2008, the last recession when the financial system collapsed.
But now in 2022, this time around, the finances of oil and gas giants have benefited from higher prices that stem from Russia’s invasion of Ukraine. Consumers in the UK and Europe are facing sky-high, crippling energy bills, and a broader cost of living crisis overall.
The climate emergency is high up on the international agenda, but it has not stopped oil and gas companies from making record earnings.
Climate laws have forced oil companies into investments in renewable energy and other net zero-compatible projects that would have been laughed out of a supermajor’s boardroom in previous decades.
Even the massive American giants ExxonMobil and Chevron have been forced to admit begrudgingly that some form of low-carbon technologies are going to be necessary, even as they lag behind the rest of an already lagging industry.
The oil top dogs know how to talk the talk, however. BP chief executive Bernard Looney spoke to analysts on Tuesday and repeatedly highlighted BP’s lower-carbon investments. BP wants to seem like a leader in UK electric car charging, but an analysis of oil company investments makes for a less flattering reading of the company.
A UK Cabinet member, Alok Sharma, highlighted a comparison between BP’s share buybacks, worth $3.5bn this quarter alone, and its planned spending on low-carbon energy for the whole year of $2.5bn. We should be able to “see if their actions match their rhetoric”, he wrote.
BP, Shell, ExxonMobil, Chevron, and France’s Total made enormous underlying profits of nearly $100bn in the first half of 2022. That is triple their earnings in the same period in 2021.
The same companies have so far announced shareholder returns for this year worth $52bn – more than half their profits for the first half.
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