By Nandita Bose and Jarrett Renshaw
WASHINGTON (Reuters) – The White House on Friday launched a new attack on U.S. oil companies to use profits to boost supply after Chevron said it had doubled its annual profit for 2022. He accused them of paying shareholders instead.
Chevron posted a record $36.5 billion profit in 2022. That’s more than double what he did in the same period last year and kicked off a season where analysts expect global energy supplier earnings to surge.
Earlier this week, Chevron said it would triple its share buyback spending to $75 billion over five years under current guidance. Other oil companies are expected to follow suit.
“The company clearly has everything it needs to ramp up production, including record profits and thousands of approved permits,” White House press secretary Abdullah Hassan said in a statement.
“The only thing that gets in the way is their own decisions, rather than pouring casual profits into the pockets of management and shareholders to increase supply.”
Under former President Donald Trump, Congress passed significant retroactive tax cuts for Big Oil as demand for fuel fell during the COVID lockdown. After oil prices soared following Russia’s invasion of Ukraine, European governments imposed ill-conceived taxes on the oil industry, but US lawmakers are unlikely to do the same.
Analysts predict that Chevron and Exxon-Mobil — the two largest oil producers in the United States — are poised to post record annual profits of nearly $100 billion combined in 2022.
Chevron did not immediately respond to a request for comment.Exxon declined to comment.
Hasan’s comments mark the latest in a series of attacks from the White House accusing oil companies of pouring bounties on investors. The Joe Biden administration made several unsuccessful attempts last year to persuade oil companies to increase production as gasoline prices rose. Biden ultimately decided to tap into the US Strategic Petroleum Reserve (SPR).
Last week, Energy Secretary Jennifer Granholm said Biden would reject a US House Republican bill that, if passed by Congress, would limit the president’s ability to use oil reserves.
U.S. oil producers as a whole are increasing their budgets for new energy projects this year, but the spending will be far less than what is being paid to shareholders.
The energy industry was one of the top sectors in the S&P 500 index last year, but then underperformed the broader market for years.
(Reporting by Nandita Bose and Jarrett Renshaw in Washington; Editing by Heather Timmons and David Gregorio)
