Oil firms seem more interested in shareholders than net zero
Oil companies are partying like it’s 2008. As during the global financial crisis that took hold that year, economies face the prospect of deep recessions but oil companies are reaping record profits. BP on Tuesday became the latest in the procession to post bumper results, with its best quarter since record earnings in 2008, just as the financial system collapsed.
This time around, the finances of the oil and gas giants have benefited from the higher prices resulting from Russia’s invasion of Ukraine, just as consumers in the UK and elsewhere face sky high energy bills and a broader cost of living crisis.
There were calls for windfall taxes back in 2008, as now, but some things have changed. The climate emergency has risen up the agenda, and been signed into law. That has 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 US giants ExxonMobil and Chevron – laggards in an industry of laggards – have been forced to admit begrudgingly that some form low-carbon technologies are going to be necessary.
BP chief executive Bernard Looney knows how to talk the talk. Speaking to analysts on Tuesday he repeatedly highlighted BP’s lower-carbon investments. On their own they can make for impressive reading – BP is a leader in UK electric car charging, for instance – but a quick look at oil company investments makes for less flattering reading.
Alok Sharma, a member of the UK cabinet (albeit a lame-duck one), on Tuesday highlighted a comparison between BP’s share buybacks, worth $3.5bn (£2.9bn) this quarter alone, and its planned spending on low-carbon energy for the whole year of $2.5bn. We should be
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