Today, Royal Dutch Shell and ConocoPhillips were the first of the Big Five Oil companies to announce their total 2012 earnings, raking in $7.3 billion and $1.8 billion in the fourth-quarter, bringing their yearly profits to a whopping $27 billion and $8.4 billion, respectively.
Despite being some of the most profitable companies in the world, analysts are expressing disappointment with both Shell and ConocoPhillips’ posted earnings. According to the New York Times, the lower than expected profits from Shell are “largely due to lower earnings in Shell’s core exploration and production business, mainly because of weak performance in the Americas, where Shell’s multibillion Alaska drilling program has encountered multiple snafus and delays.” Conoco’s lower earnings are partly a result of the split last year of ConocoPhillips into two companies — ConocoPhillips and Phillips66 — with ConocoPhillips controlling upstream business, and Phillips66 taking over the refineries side.
Shell and ConocoPhillips, which are ranked as the first and ninth-largest companies on the Fortune 500 Global companies list, continue to receive billions of dollars in taxpayer-funded subsides, while at the same time, funneling millions of dollars toward lobbying against vital environmental and public health protections.
Below are the highlights of where Shell and ConocoPhillips spend their earnings:
Royal Dutch Shell:
- Shell received a $200 million annual tax break in 2011.
- Shell has $18.5 billion in cash-on-hand.
- In the fourth quarter, Shell used $1.7 million of its profits to buy back its own stock.
- Shell’s oil production decreased by 3 percent (1.599 barrels of liquids/day vs. 1.644 barrels per day) compared to this time last year.
- Shell was the top lobbying spender of the oil and gas industry in 2012 – spending over $14.4 million in 2012. It also ranked in the Top 20 Lobbying Spenders across all industries last year.
- Questions have been raised that the impetus for Shell to move the Kulluk on New Year’s Eve, despite the harsh weather conditions, was an attempt to avoid paying an additional $6 million in states taxes. Company spokesman Curtis Smith recently admitted that a Jan. 1 state tax assessment was “a consideration” in the timing of the rig’s move. Shell has a history of tax dodging. For example, it has offshored pre-tax profits to avoid UK taxes.
- ConocoPhillips receives an estimated annual average of $600 million dollars in tax breaks.
- ConocoPhillips spent $3.8 million lobbying Congress in 2012.
- Conoco has contributed over $622,000 to federal campaigns in 2012, with 89 percent of the contributions going to Republicans.
- Conoco is sitting on $750 million in cash reserves.
- Throughout 2012, the company spent 60 percent of its annual profit — or $5.1 billion — buying back its own stock, enriching its largest shareholders and executives.
- Conoco’s oil and oil equivalent production is 2 percent higher than this time last year.
- Conoco paid an 18 percent effective federal tax rate in 2011. This is nearly half of the 35 percent standard top corporate tax rate.
- Current CEO, Ryan Lance received over $5.9 million in compensation in 2011. He sits on the board of the American Petroleum Institute, the lobbying arm of the oil and gas industry.
Exxon Mobil and Chevron will be the next of the Big Five Oil companies to announce their 2012 profit earnings on Friday, February 1.