London Daily

Focus on the big picture.
Thursday, Oct 09, 2025

Oil firms seem more interested in shareholders than net zero

Oil firms seem more interested in shareholders than net zero

Analysis: Is the energy industry willing to invest in renewables rather than dividends and buybacks?

Oil companies are partying like it’s 2008. As during the global financial crisis that took hold that year, economies face the prospect of deep recessions but oil companies are reaping record profits. BP on Tuesday became the latest in the procession to post bumper results, with its best quarter since record earnings in 2008, just as the financial system collapsed.

This time around, the finances of the oil and gas giants have benefited from the higher prices resulting from Russia’s invasion of Ukraine, just as consumers in the UK and elsewhere face sky high energy bills and a broader cost of living crisis.

There were calls for windfall taxes back in 2008, as now, but some things have changed. The climate emergency has risen up the agenda, and been signed into law. That has forced oil companies into investments in renewable energy and other net zero-compatible projects that would have been laughed out of a supermajor’s boardroom in previous decades. Even the US giants ExxonMobil and Chevron – laggards in an industry of laggards – have been forced to admit begrudgingly that some form low-carbon technologies are going to be necessary.

BP chief executive Bernard Looney knows how to talk the talk. Speaking to analysts on Tuesday he repeatedly highlighted BP’s lower-carbon investments. On their own they can make for impressive reading – BP is a leader in UK electric car charging, for instance – but a quick look at oil company investments makes for less flattering reading.


Alok Sharma, a member of the UK cabinet (albeit a lame-duck one), on Tuesday highlighted a comparison between BP’s share buybacks, worth $3.5bn (£2.9bn) this quarter alone, and its planned spending on low-carbon energy for the whole year of $2.5bn. We should be able to “see if their actions match their rhetoric”, he wrote.

BP, its FTSE 100 rival Shell, the US companies ExxonMobil and Chevron, and France’s Total between them made underlying profits of nearly $100bn in the first half of 2022 – triple their earnings in the same period in 2021. The same companies have so far announced shareholder returns (via dividends and share buybacks) for this year worth $52bn – more than half their profits for the first half.

Returning money to shareholders can have upsides for the broader population, as savers and pension funds will be large beneficiaries. But share ownership is dominated by the wealthiest, and a stream of dividends will do very little indeed to help poorer households in the UK or elsewhere cope with soaring energy prices.

Energy prices will remain high up the political agenda around the world. The issue is likely to be at the top of the in-tray for the UK’s new prime minister once the Conservative party chooses between Liz Truss and Rishi Sunak. The average energy bill in Great Britain could reach more than £3,600 a year this winter, according to the latest estimates.

Shell’s boss, Ben van Beurden, last week said he “cannot perform miracles” to bring on new energy supply and lower bills for households. But the history of renewable energy technology – such as the astonishing increase in wind and solar power as costs fell – suggests that miracles are not necessary: what is required is the will to invest in a speedier transition.

Finance bosses are taught that they should return cash to shareholders when they are unable to make more money themselves with new investments. The pace of buybacks and dividends during 2022 suggests that oil companies are content to hand more cash to investors rather than invest more to speed up the net zero transition.

Newsletter

Related Articles

0:00
0:00
Close
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
×