Big Oil doubles profits in blockbuster 2022

Item 1 of 5 Logo of British Petrol BP is seen at petrol station in Pienkow, Poland, June 8, 2022. REUTERS/Kacper Pempel/ File Photo
[1/5]Logo of British Petrol BP is seen at petrol station in Pienkow, Poland, June 8, 2022. REUTERS/Kacper Pempel/ File PhotoPurchase Licensing Rights, opens new tab
  • Summary
  • Companies
  • Big Western oil firms more than double profits to $219 bln
  • Surge in revenue allows them to reduce debt
  • Spending rises, climate targets pushed back
LONDON, Feb 8 (Reuters) - Big Oil more than doubled its profits in 2022 to $219 billion, smashing previous records in a year of volatile energy prices where Russia's invasion of Ukraine reshaped global energy markets and, in some cases, the industry's climate ambitions.
The profit surge gave the oil companies scope to increase spending on oil and gas projects, and a chance for some to rethink energy transition strategies to meet new demands for security of supply.

Sign uphere.

The combined $219 billion in profits allowed BP(BP.L), opens new tab, Chevron(CVX.N), opens new tab, Equinor(EQNR.OL), opens new tab, Exxon Mobil(XOM.N), opens new tab, Shell(SHEL.L), opens new tab and TotalEnergies(TTEF.PA), opens new tab to shower shareholders with cash.
The top Western oil companies paid out a record $110 billion in dividends and share repurchases to investors in 2022, spurring outraged calls on governments to impose windfall taxes on the industry to help consumers with surging energy costs.
Norway's Equinor on Wednesday reported adoubling of adjusted operating profit in 2022 to $74.9 billion on the back of a surge in European natural gas prices and as it became Europe's largest gas supplier after Russia's Gazprom(GAZP.MM), opens new tab cut deliveries amid the West's support for Ukraine.
Oil companies last year also pulled out of Russia, a major energy producer, leading to huge writedowns, includingBP's $24 billion exit from its 19.75% stake in Kremlin-controlled oil giant Rosneft(ROSN.MM), opens new tab.
Reuters Graphics
Reuters Graphics

LOW DEBT

The sharp rise in oil and gas prices, falling debt levels and the abrupt drop in Russian supplies to Europe also drove boards to increase spending on fossil fuel production as governments prioritised security of supply.
TotalEnergies Chief Executive Patrick Pouyanne said after the French company reportedrecord profits of $36.2 billion on Wednesday that the global backdrop remained very favourable for energy companies, with the relaxing of COVID-19 measures in China pushing up demand for 2023.
"We wouldn't be surprised to see oil back to $100 a barrel," Pouyanne said. Benchmark oil prices are currently near $85 a barrel.
European companies that have outlined plans to reduce or slow oil and gas investments and build large renewables and low-carbon businesses to cut greenhouse gas emissions adjusted their strategies.
None were more stark than BP Chief Executive Bernard Looney's move torow back on plans to reduce the British company's oil and gas output and carbon emissions by 2030.
"We need lower carbon energy, but we also need secure energy, and we need affordable energy. And that's what governments and society around the world are asking for," Looney said on Tuesday.
BP's shareshit their highest in three and a half years on Wednesday, building on a 7.6% gain a day earlier following the results and shift in strategy.
Bernstein analyst Oswald Clint called BP "a lesson in pragmatism, prioritisation and performance", rating it "outperform".
"Pragmatism takes priority this week as a world short energy together with governments begging for more from companies like BP causes a response. BP will lean more into oil & gas for the remainder of this decade," Clint said in a note.
Reuters Graphics Reuters Graphics

Reporting by Ron Bousso. Editing by Jane Merriman

Our Standards:The Thomson Reuters Trust Principles., opens new tab

Purchase Licensing Rights

Thomson Reuters

Ron is the Reuters Energy Columnist. He offers commentary on global energy markets and their intersection with geopolitics, the economy and every day life. From oil and gas to solar and wind power, the world's growing demand for energy is shaping governments' efforts to expand their economies while the world also seeks to decarbonize.Prior to that, Ron was Oil and Gas Corporates Correspondent at Reuters since 2014, covering the world’s top oil and gas companies and their transition into low carbon energy. He has broken major stories on companies including Shell, BP, Chevron and Exxon. He also looks at the physical oil markets with a focus on European refining.