London Daily

Focus on the big picture.
Friday, Nov 06, 2026

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
Office for National Statistics Reports Stable Consumer Confidence and Modest Retail Growth Heading into Winter
Welsh Government Launches Strategic Regional Transport Initiative to Modernize Rail Links Across South Wales
Home Office Expands Digital Border Security Controls and Electronic Travel Authorisations for Inbound Visitors
Scottish Government Announces Emergency Housing Investment Package to Tackle Urban Homelessness Crises
Northern Ireland Executive Reaches Bipartisan Consensus on Public Sector Pay Reform and Budget Allocations
Automotive Manufacturing Sector in the West Midlands Welcomes New Electric Vehicle Supply Chain Investments
Department for Energy Security and Net Zero Approves Offshore Wind Expansion in the North Sea
HM Treasury Finalizes Regulatory Framework for Stablecoins and Digital Asset Markets in London
National Health Service Unveils Comprehensive Digital Integration Strategy to Slash Hospital Waiting Lists
Bank of England Leaves Interest Rates Unchanged Amid Persistent Wage Growth and Inflationary Pressures
United Kingdom and Caribbean Nations Agree to Establish Formal Diplomatic Dialogue Following Reparations Discussions
Cambridge University Appoints Senior Barrister to Lead Independent Review into Death of Academic Jason Arday
Historic Hastings Castle and Kent Dickens Chalet Added to National Heritage at Risk Register Amid Deterioration Concerns
Incoming British Ambassador to Japan Calls for Deepened Bilateral Cooperation on Artificial Intelligence and Semiconductors
Milburn Review Urges Employment Revolution to Unlock Workforce Opportunities for Young Disabled Britons
British Healthcare Worker Evacuated from Democratic Republic of Congo to United Kingdom Following Ebola Exposure
United Nations Refugee Agency Criticises Government Proposal for Thirty-Year Earned Settlement Pathways for Asylum Seekers
Parliamentary Inquiry Warns United Kingdom Remains Exposed to Chinese Critical Mineral Dependencies
Bank of England Prepares Interest Rate Decision as Inflation Pressures Prompt Expectation of Four Percent Benchmark
Department for Business and Trade Overhauls Protection Standards for Digital Animation and Moving Image Files
Intellectual Property Office Introduces Thirty-Month Grace Period for International Product Launches
Intellectual Property Office Targets Anti-Competitive Filings With New Powers to Verify Novelty Before Registration
Creative Industries Minister Ian Murray Praises Regulatory Reforms to Safeguard Small Businesses and Micro-Enterprises
Government Unveils Major Design Framework Overhaul to Protect British Creators and Boost Economy
Global Asset Management Reports Surge in British Dividend Payouts Driven by Strong Financial and Mining Sectors
HM Treasury Confirms Strongest Group of Seven Growth Figures as Fiscal Consolidation Plans Progress
Department for Energy Security and Net Zero Approves Construction of New North Sea Offshore Wind Hub
Northern Ireland Executive Finalizes Public Sector Pay Agreements Following Months of Inter-Agency Negotiations
Welsh First Minister Eluned Morgan Secures Cross-Party Support for Regional Clean Energy Infrastructure Bill
Competition and Markets Authority Launches Formal Investigation Into Dominant Artificial Intelligence Cloud Partnerships
United Kingdom Foreign Secretary David Lammy Concludes High-Level Diplomatic Mission to Washington and Ottawa
Scottish Government Announces Emergency Housing Investment Package to Address Escalating Urban Homelessness
Chancellor Rachel Reeves Finalizes Corporate Tax Adjustments Ahead of Upcoming Business Investment Summit
National Health Service England Unveils Emergency Winter Resilience Plan to Combat Projected A&E Overcrowding
Bank of England Monetary Policy Committee Votes to Hold Base Interest Rate Steady at Four Point Seven5 Per Cent
UK Gross Domestic Product Expands by Zero Point Four Per Cent in Third Quarter Driven by Resilient Services Growth
Northern Ireland Executive Agrees on Multi-Year Public Sector Pay Restructuring Framework at Stormont
Department for Transport Confirms Acceleration of Electric Vehicle Charging Infrastructure Rollout Along Strategic Motorways
Welsh Government Announces Emergency Funding Package to Support Agricultural Sector Facing Severe Weather Impacts
High Court Rules in Favor of Environmental Coalition Over Government Carbon Reduction Plan Deficiencies
Office for National Statistics Reports Stable Retail Sales Growth Supported by Strong Digital Commerce Volumes
Scottish First Minister John Swinney Secures Cross-Party Support for Renewable Energy Export Expansion
National Health Service Digital Reports Major Breakthrough in Reducing Elective Waiting Lists Across England
Chancellor Rachel Reeves Outlines Infrastructure Spending Reforms to Boost Regional Economic Growth Across Northern England
Bank of England Holds Baseline Interest Rate at Five Percent Amid Persistent Core Inflation Pressures
House of Lords Advances Representation of the People Bill to Modernize Electoral Law Ahead of General Election
Financial Markets and Private Equity Assess Tax and Corporate Realignment Following Recent Chancellor Budget Adjustments
Justice Committee Warns Legal Aid Is a Service in Managed Decline Due to Inadequate Government Funding Responses
Royal Navy Intercepts Russian Intelligence Vessel and Warships Across Intensive North Sea Operations
Business and Trade Committee Slams Government Policy on China as Fragmented and Lacking Strategic Direction
×