TotalEnergies is unquestionably one of the big winners of the current energy crisis: the French major has generated the largest profit in its history, thanks to the surge in gas and oil prices in the wake of the war in Ukraine, resurrecting calls to tax “superprofits” more and to stop the exploitation of hydrocarbons. The French company, the fifth largest private oil group in the world, unveiled, on Wednesday February 8, a net profit for the year 2022 of 20.5 billion dollars (19 billion euros), the largest in its history. The French major is doing even better than the 16 billion dollars recorded in 2021, its previous record.
For the second year in a row, the group is pocketing colossal profits after the historic loss of 7.2 billion dollars in 2020 due to the Covid-19 crisis. Without the impairments linked to its gradual withdrawal from its activities in Russia during the year, for an amount of nearly 15 billion dollars, the group’s adjusted net profit even climbed to 36.2 billion dollars in 2022. In December, the group ended up distancing itself from its main Russian partner, the gas giant Novatek, but retaining its presence in huge LNG operations in Russian Siberia.
As for its rivals ExxonMobil or Chevron, whose US President Joe Biden has denounced the “scandalous” profits, the results of TotalEnergies were boosted by the strong comeback in demand for oil after the Covid-19 pandemic and even more so by the surge in hydrocarbon prices following the start of the war in Ukraine. The barrel of Brent, the reference for black gold, was worth an average of 102 dollars in 2022 against 71 dollars in 2021, while gas prices in Europe have sometimes been multiplied by 15. More than ever, gas is the priority of the group, more than oil: it relies on liquefied natural gas (LNG), on which Europe is very dependent since the closure of the Moscow gas pipelines.
Liquefied natural gas, an asset for the firm
In 2022, “the company took full advantage of its global LNG portfolio”, and recorded a 15% increase in sales, welcomed CEO Patrick Pouyanné in a press release. And everything indicates that the prices of liquefied natural gas (LNG) will remain supported: with a foreseeable return of Chinese demand, “we will still have to fight”, declared the CEO during a presentation to the press. Given its results, TotalEnergies will grant its shareholders a total dividend of 3.81 euros per share for the year 2022, including 1 euro in exceptional dividend, already paid in December 2022, and it will cancel shares equity, which will mechanically benefit the historical shareholders.
These predictable benefits, unveiled in the midst of a climate emergency and purchasing power crisis, at a time when energy bills are weighing on households and businesses, had caused a reaction even before their publication. “For a fairer world and for the climate, we must stop the expansion of oil and gas projects,” said Tuesday Greenpeace France on Twitter, when other organizations including the collective #StopTotal, 350.org and Friends of the Earth, claim “that its illegitimate profits be taxed for […] accelerate a fair energy transition for all”.
On Twitter, the former Minister of the Environment, Ségolène Royal says:
TotalEnergies accused of greenwashing
Demonstrations are expected outside the headquarters of TotalEnergies on Wednesday. In forum in Le Monde, published on February 6, five winners of the Goldman prize for the environment have called on financial institutions to no longer support the oil and gas expansion strategy of TotalEnergies, which they consider “responsible for the acceleration of global warming and social injustices.” The tanker is the subject of a complaint from three associations, for “questionable commercial practices” in terms of the environment and an investigation was opened in December 2021 by the economic and financial center of the Nanterre prosecution.
The hydrocarbon giant is certainly investing more and more in low-carbon energies (4 billion in 2023 against 3 in 2022). But as long as the world “needs it”, he has always said he wants to continue to supply oil and gas and develop gas projects like in Lebanon and Qatar, or oil projects in Africa. TotalEnergies has made some efforts: it has already halved its methane emissions between 2010 and 2021, dropping from 120,000 to 49,000 tonnes per year. And it has pledged to go further, with the promise of reducing its emissions by 80% by 2030 compared to 2020.
In France, the National Assembly opposed the idea of taxing these windfall profits. The oil group conceded a discount at the pump, between September and December, and it increased wages after a hard strike in the fall which caused monster shortages in service stations. “I understand that there is a societal, collective, complicated subject there”, admitted Patrick Pouyanné to the Belgian press at the end of January, when asked about these “superprofits”, while posing as one of the “10 biggest contributors in the world” through the 33 billion dollars in taxes and duties that it will pay for 2022, instead of 16 for 2021. “It is more than any other French company. And I do not believe, moreover , that in the world there are many companies that pay as much tax as we do”, he said to The Express en last October.