BP announced $2.7 billion in profits for the second quarter Tuesday morning, earning just short of $7 billion so far this year. In a release announcing the numbers, Chief Executive Bob Dudley implied that exceptionally high tax rates were hurting their business, stating that “the results show strong underlying pre-tax performance,” when in fact, the five Big Oil companies receive an estimated $2.4 billion in subsidized tax breaks annually.
BP has also complained that its continuing operations in the Gulf of Mexico have caused the company to suffer. In November 2012, BP agreed to a settlement in criminal charges linked to the Deepwater Horizon explosion that killed 11 workers and spilled over 200 million barrels of crude oil into the Gulf. A separate civil trial is currently ongoing and fines are expected to reach up to $17 billion if BP is found guilty of gross negligence. However, these operations haven’t stopped the company from buying back $2.4 billion worth of their own stocs to enrich board members, executives and shareholders. The New York Times reported that BP is expected to buy back a total of $8 billion this year and is paying higher dividends than the previous year.
With cleanup efforts still ongoing today, it is difficult to analyze the exact dollar amount the spill has cost the Gulf region. Impacts are still being felt in coastal economies and we may never know the full extension of the damage to the wildlife and environment. Yet BP is balking at the amount of money it owes those affected by the Gulf spill, arguing it’s being forced to pay millions in settlement money to businesses with overestimated or fictitious claims. BP also claims that by their estimates, 10 percent of the oil was broken up by dispersants and consequently, BP should not have to pay fines owed under the Clean Water Act on that 10 percent.
BP, along with Shell, is also being investigated by the European Union for price-rigging in the global oil market. The European commission recently raided their offices after accusing BP of more than a decade worth of collusion. While BP has warned that production will be lower in the third quarter, the company won’t suffer while sitting on over $15 billion in cash reserves.
Exxon Mobil, Shell and ConocoPhillips will announce their second quarter profits this Thursday, August 1st.
Tiffany Germain is the Senior Climate/Energy Researcher for the CAP Action War Room.