Oil Magnates Celebrate Profits With A Rain of Cash, While the World Burns

Posted by John Donovan: 2 Jan 2024

Oh, what a time to be alive in the golden age of oil! As the world gasps in horror at climate change and energy crises, our heroic oil companies – BP, Shell, Chevron, ExxonMobil, and TotalEnergies – are set to dole out a staggering $100 billion in payouts to their beloved shareholders. It’s like a fairy tale, where the rich get richer while the planet heats up!

In 2022, these noble guardians of fossil fuels blessed their shareholders with $104 billion in dividends and buybacks, according to the Institute for Energy Economics and Financial Analysis (IEEFA). All this, after a year of record-breaking profits thanks to the turmoil in energy markets. Who knew that a global crisis could be so lucrative?

Trey Cowan of IEEFA says, “These five super-majors could set a record for distributions to shareholders in 2023, topping the $104bn spent during the 2022 calendar year.” 

Shell, the beacon of corporate responsibility, announced plans to pay shareholders at least $23 billion this year, despite its profits taking a hit. Why invest in renewable energy when you can make it rain for your investors?

BP isn’t far behind. They surprised everyone with a 10% dividend increase for 2023, after buying back $10 billion of shares and raising dividends by 20%. Investors must be over the moon, especially after BP’s profits fell more than expected. After all, who cares about consistency in business practices?

Meanwhile, the oil industry faces the wrath of climate campaigners and households crippled by high energy costs. But fear not, for Alice Harrison of Global Witness puts it best: “The global energy crisis has been a giant cash grab for fossil fuel firms.” Why change a winning formula?

Some believe these payouts are just smoke and mirrors to distract from the public backlash. But Dieter Helm, an economic policy professor, thinks the industry is just showing confidence in its future profitability. After all, why worry about climate change when there’s money to be made?

S&P Global Market Intelligence analysts note that share buybacks are a clever way for companies to share profits without the long-term commitment of raising dividends. It’s like giving a gift that you can take back anytime – how thoughtful!

With the oil industry expected to relinquish its top spot for dividend payouts to banks in 2024, it seems the party might not last forever. Cowan from IEEFA warns that future distributions to shareholders are likely to fall. But until then, let’s toast to the oil giants – champions of shareholder wealth in a world desperate for climate action!

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