Big Oil doubles profits in 2022, surpassing previous records

Big Oil doubles profits in the blockbuster 2022 U.S. government grants six month license allowing Chevron to boost oil output in Venezuela.

LONDON Reuters -- Big Oil more than doubled its profits in 2022 to $219 billion, surpassing previous records in a year of volatile energy prices, where Russia's invasion of Ukraine reshaped global energy markets and in some cases led to the industry's climate ambitions.

The profit surge gave the oil companies the chance to increase spending on oil and gas projects, and give them a chance to rethink energy transition strategies to meet new demands for security of supply.

The combined $219 billion in profits allowed BP, Chevron, Equinor, Exxon Mobil, Shell and TotalEnergies to shower shareholders with cash.

In 2022, the top Western oil companies paid out record $110 billion in dividends and share repurchases to investors, spurring outraged calls for windfall taxes on the industry to help consumers with rising energy costs.

Norway's Equinor reported a doubling of its adjusted operating profit in 2022 to $74.9 billion in the wake of a surge in European natural gas prices and as it became Europe's largest gas supplier after Russia cut deliveries due to the West's support for Ukraine.

Oil companies last year pulled out of Russia, a major energy producer, leading to huge writedowns, including BP's $24 billion exit from its 19.75% stake in the Kremlin-controlled oil giant Rosneft.

As governments prioritized security of supply, an increase in oil and gas prices, falling debt levels and the abrupt drop in Russian supplies to Europe caused boards to increase spending on fossil fuel production.

After the French company reported record profits of $36.2 billion on Wednesday, TotalEnergies chief executive Patrick Pouyanne said that the global backdrop remained very favorable for energy companies, with the relaxation of COVID 19 measures in China pushing up demand for 2023.

Pouyanne said we wouldn't be surprised to see oil back to $100 a barrel. Benchmark oil prices are close to $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 have outlined plans to reduce or slow down their oil and gas investments.

BP Chief Executive Bernard Looney said he was more stark than BP Chief Executive Bernard Looney'sLooney's move to row back on plans to reduce the British company's oil and gas output and carbon emissions by 2030.

We need less carbon energy, but we also need secure energy, and we need affordable energy. Looney said on Tuesday that governments and society around the world are asking for that.

BP's shares hit their highest level in three and a half years on Wednesday, building on a 7.6% gain a day earlier in the day following the results and shift in strategy.

Oswald Clint, a Bernstein analyst, called BP a lesson in pragmatism, prioritisation and performance rating, outperforms Pragmatism this week, as governments begging for more from companies like BP cause a response. Clint said that BP will lean more into oil gas over the rest of the decade.