Sunday, April 14, 2024

Big Oil set to open cash taps

Date:

Share post:

London – Top Western energy companies are expected to unleash billions in returns to shareholders when they announce what is set to be a second-straight quarter of record-breaking profits, lifted by stellar refining margins and high oil and gas prices.

A rapid recovery in demand following the end of pandemic lockdowns and a surge in energy prices, driven by Russia’s invasion of Ukraine, have boosted profits for companies such as Exxon Mobil and Shell after a two-year slump.

Exxon earlier this month said it could post its strongest quarter yet, with profit potentially surpassing U.S. $16 billion, almost twice its first-quarter earnings.

The companies have used the cash surge to cut debt accumulated during the pandemic, and, as they reach their debt targets, analysts anticipate they will increase cash distribution to shareholders.

The profit bonanza has stirred demands for governments to increase taxes on energy companies to help consumers deal with record-high electricity and fuel prices.

Britain, home to Shell and BP, imposed a 25 per cent windfall tax in May.

In the United States, President Joe Biden accused Exxon of making “more money than God” and said companies were exploiting a global oil supply shortage to fatten profits.

Oil prices rose in the second quarter, with benchmark Brent crude averaging around U.S. $113 a barrel in the quarter, compared with U.S. $102 a barrel in the first three months.

The energy majors’ good fortunes – BP chief executive officer Bernard Looney called his company a “cash machine” – has also increased pressure on boards to revise their shareholder returns plans, drawn up mostly after the pandemic struck.

Shell, BP  and TotalEnergies have indicated they will boost returns in the form of share repurchases.

But some investors say they should do more. (Reuters)

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Related articles

Fogging Schedule: April 15 to 19

A number of communities in St Michael and Christ Church will be fogged by the Ministry of Health...

Former Surinamese president Bouterse ineligible to enter United States

The United States on Friday imposed sanctions on former Surinamese President Desiré Delano Bouterse and six former Surinamese...

Gunners failed to fire against Villa

Aston Villa produced an outstanding performance to stun Arsenal at Emirates Stadium and leave Manchester City in pole...

Liverpool’s title hopes hit by loss to Palace

Andy Robertson insisted Liverpool will "keep fighting" despite their Premier League title hopes suffering a huge blow as...