WASHINGTON - The White House expressed outrage on Tuesday at ExxonMobil Corp’s record net profit in 2022 of US$56 billion (S$73.6 billion), a historical high not just for the company but for the entire Western oil industry.
Oil majors are expected to break their own annual records due to high prices and soaring demand, pushing their combined take to nearly US$200 billion. The scale has brought renewed criticism of the oil industry and sparked calls for more countries to levy windfall profit taxes on the companies.
A White House statement said Exxon’s profit margin was particularly galling as Americans paid record-high prices at the pump. It criticised attempts by Republicans in the House of Representatives to push policies aimed at supporting the oil industry.
“The latest earnings reports make clear that oil companies have everything they need, including record profits and thousands of unused but approved permits, to increase production, but they’re instead choosing to plough those profits into padding the pockets of executives and shareholders while House Republicans manufacture excuse after excuse to shield them from any accountability,” the White House said.
US President Joe Biden has blasted oil companies and refiners for much of the last year for enjoying surging profits as petrol prices soared. In June, Mr Biden wrote to executives of major oil refiners and complained they had cut back on production to pad profits, according to a copy of a letter seen by Reuters.
Exxon’s chief financial officer Kathryn Mikells responded to growing criticism over the industry’s windfall profits and suggested the answer is not increased taxes.
“We look at the European Union tax on the energy sector… It’s just unlawful and bad policy trying to tax something when what you actually need is for it to increase,” Ms Mikells said. “It has the opposite effect of what you’re trying to achieve.”
Exxon’s full-year profit, excluding one-time items, jumped 157 per cent from 2021, far exceeding the driller’s prior record of US$45.2 billion in 2008.
Chief executive Darren Woods said Exxon is harvesting the rewards from fossil-fuel investments in recent years that were panned as ill-timed.
“Our work began years ago, well before the pandemic, when we chose to invest counter-cyclically,” he said during a conference call with analysts on Tuesday. “We leaned in when others leaned out, bucking conventional wisdom.”
Exxon’s daily production surpassed forecasts at the equivalent of 3.82 million barrels of oil, and major projects in the US Permian Basin and Guyana are expected to drive growth over the next five years.
The new investments have helped expand its profit margin to 14 per cent from 10 per cent in 2012, Mr Woods said.
Exxon’s results followed those of US rival Chevron Corp, which posted a surprise earnings miss last week just days after announcing a mammoth US$75 billion share-buyback programme.
Chevron was excoriated by the White House and Democratic members of Congress when it disclosed plans last week to funnel US$75 billion to investors in the form of stock repurchases.
Exxon expanded buybacks multiple times last year and pledged to repurchase US$35 billion of stock through 2024, unchanged from previous guidance.
Ms Mikells gave no indication that Exxon will be increasing buybacks soon, even as the company posted the eighth-largest cash haul in the history of the S&P 500 Index. REUTERS, BLOOMBERG
