Royal Dutch Shell Plc  .com Rotating Header Image

Oil giants in spotlight but it could get much hotter

FT Home

Oil giants in spotlight but it could get much hotter

By Ed Crooks and Andrew Taylor

Published: June 14 2008 03:00 | Last updated: June 14 2008 03:00

Targeting large and well-known companies rather than their small, unknown contractors is a standard tactic in industrial action.

But Shell’s insistence that it is not responsible for the bust-up between tanker drivers and the contractors it uses has not stopped it being dragged under the spotlight.

“This dispute could have been resolved if Shell had advanced a fraction of the billions of pounds in profit they make every month,” said Len McCluskey, assistant general secretary of Unite, the drivers’ union.

“One of the world’s richest companies is prepared to play Pontius Pilate and see the British public inconvenienced rather than settle this dispute for a sum smaller than the chairman’s pay increase last year.”

Mr McCluskey’s “billions” of pounds of profit every month may be an exaggeration – during the first quarter Shell madeabout £1.3bn a month in net profit – but with crude oil at $135 a barrel and diesel at £1.30 a litre, few people are inclined to give oil companies the benefit of the doubt.

Polling firm YouGov asked people recently to identify the culprits for soaring oil prices. Worldwide demand was the most popular choice, favoured by 59 per cent, but “the big oil companies” were second with 44 per cent and about the same blamed the British government.

“There is respect for oil companies, but not much affection. So when petrol prices rise there is not much sympathy for them,” said Stewart Lewis of pollsters Ipsos Mori.

That lack of public affection has yet to expose oil companies to attacks by politicians. Last month industry chiefs were summoned by Gordon Brown, who urged them to pump more oil, but the measures announced by the prime minister were merely small tax breaks to encourage North Sea production. Mr Brown bases his energy policy on new nuclear power stations – an irrelevance to the oil giants.

The rise in the oil price has done little for investors in the producers. During the past three years the price of crude has gone up by 150 per cent but Shell’s shares are only 12 per cent higher.

While Britons may feel cool towards the oil giants, the companies are far from facing the same depth of opposition that threatens them in the US.

Attacks on alleged profiteering by “big oil” are a regular feature of the political landscape across the Atlantic and there are frequent proposals to impose higher taxes. Barack Obama, the Democratic party’s presidential candidate, has made his plan to “repeal tax breaks for the oil and gas industry” a central element of his energy policy.

Shell and other companies can be grateful that a similar threat in Britain is still a distant prospect.

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Oil giants in spotlight but it could get much hotter”

Leave a Comment

%d bloggers like this: