2023 Quarterly Financial Data

Q1 2023: Oil Companies Continue To Reap Profits & Hoard Cash

Fresh off a year of global chaos leading to record-shattering profits, major oil companies and their investors seem content with maintaining the status quo. According to Climate Power’s analysis of financial statements from 28 publicly-traded oil and gas companies in the first quarter of 2023:

• $78.37 billion in adjusted earnings were announced through press releases touting strong quarterly profits.

• $53.8 billion in stock buybacks ($28.835 billion) and dividends ($24.977 billion) were spent rewarding shareholders.

• $218.6 billion in cash was retained on balance sheets while rolling back green spending plans.

Holding Back Production To Pay Off Investors & CEOs

As cash continues to pour in from consumers, oil executives are focused on taking steps to prop up their stock prices, resulting in higher compensation for themselves and even more wealth for their billionaire investors. Among the companies tracked in this report, spending on stock buybacks was $28.835 billion, and spending on dividends was $24.977 billion, bringing a combined total of $53.8 billion spent funneling cash to shareholders in the quarter.

Meanwhile, providing relief to consumers by expanding supplies has clearly not been a priority. The most recent available data from the Department of the Interior showed that there were still 6,653 drilling permits approved and ready to drill as of January 31, 2023. Another important measure of drilling activity, the Baker Hughes Rig Count, saw U.S. drilling activity decline in the first quarter from 772 active rigs in the first week of January to 755 at the end of March.

These metrics make it clear that any supply problems in the market are the result of intentional choices by oil executives, not government policies.

Reneging On Climate Commitments

Oil & gas companies have taken advantage of Putin’s invasion of Ukraine to generate what the Wall Street Journal described as “a mountain of cash with few precedents in recent history.”  At the end of the first quarter, the companies tracked in this report held $218.6 billion in cash on their balance sheets.

Despite having plenty of cash available for new strategic investments, a study released this February  found that four of the world’s largest oil companies aren’t meeting their promises to tackle climate change with actual investments. Instead, they are proactively backing away from them. Earlier in the quarter, the three companies who ended up with the highest amounts of cash on their balance sheets began to make announcements pulling back from green investments:

•  Shell said it wouldn’t increase spending on renewable energy this year, saying their investor returns are more important.

• Exxon announced its “retreat” from one of its largest climate solutions - making biofuels from algae. 

• BP announced less ambitious targets in emission cuts.

While most oil companies choose not to break out segment data on clean energy investments, filings from Shell and BP show the magnitude of their pullbacks from previous green commitments. Shell’s cash capital expenditure in its renewables and energy solutions segment dropped by more than half from $1.076 billion in Q4 2022 to $440 million in Q1 2023. Similarly, BP’s capital expenditure in its low-carbon energy segment dropped from $577 in Q4 2022 to $366 million in Q1 2023.