Big five oil companies to reward shareholders with record payouts | Oil

The world’s five largest listed oil companies are expected to reward their investors with record payouts of more than $100bn (£79bn) for 2023 against a backdrop of growing public outrage at fossil fuel profits.

The five “super-majors” – BP, Shell, Chevron, ExxonMobil and TotalEnergies – showered shareholders with dividend payments and share buybacks worth $104bn in the 2022 calendar year, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

The bumper payouts followed a year of record profits for big oil and gas companies after Russia’s invasion of Ukraine upended global energy markets, triggering a rise in the international price of Brent crude and record gas prices across Europe.

Financial analysts at IEEFA said the companies were likely to pay even greater shareholder distributions this year despite weaker commodity market prices leading to lower profits. The payouts will also follow a year that is expected to have been hotter than any other on record, with the climate emergency leading to a series of extreme weather events.

Trey Cowan, an analyst at the IEEFA, said: “At the current pace of distributions via share buybacks and dividends, these five super-majors could set a record for distributions to shareholders in 2023, topping the $104bn spent during the 2022 calendar year.”

Shell angered climate campaigners in November by setting out plans to pay shareholders at least $23bn in rewards this year, despite falling profits. The sum is more than six times the amount Shell planned to spend on renewable energy last year.

Shell’s investor windfall follows one of the biggest annual profits in UK corporate history for 2022 when the oil company revealed profits of $40bn but weaker commodity market prices in 2023 mean its full-year earnings are expected to be lower.

BP used its second-quarter results last year to tell shareholders to expect a 10% dividend raise in 2023, well above its initial guidance. The company had promised to raise the dividend by 4% each year and buy back about $4bn of shares, assuming the oil price was about $60 a barrel, but over the previous four quarters BP had repurchased $10bn of shares and increased its dividend by 20%. The handouts were particularly surprising after the company reported a deeper-than-expected profit slump. They were welcomed by investors, amid concern among some about the plans of the former chief executive Bernard Looney to “reimagine” BP as a net zero energy company by 2050.

Oil companies continue to offer generous shareholder handouts as investors face growing pressure to divest their shares. Protests targeting oil company AGMs and conferences have become increasingly disruptive in recent years as campaigners demand more ambitious climate action.

They have also faced hostility from campaign groups that have accused the companies of profiting from Russia’s war while millions of households have been plunged into a cost of living crisis driven by high energy costs.

Alice Harrison, a campaigner at Global Witness, said: “The global energy crisis has been a giant cash grab for fossil fuel firms. And instead of investing their record profits in clean energy, these companies are doubling down on oil, gas and shareholder payouts.

“Yet again millions of families won’t be able to afford to heat their homes this winter, and countries around the world will continue to suffer the extreme weather events of climate collapse. This is the fossil fuel economy, and it’s rigged in favour of the rich.”

Some green groups believe lucrative shareholder rewards are being used to distract investors from the public backlash against the oil industry, and a terminal shift in government policies away from fossil fuels.

But Dieter Helm, a professor of economic policy at the University of Oxford and a former government adviser, believes the payouts suggest the industry remains confident about its future profitability.