Latest update April 17th, 2024 12:59 AM
Nov 01, 2022 News
By Renay Sambach
Kaieteur News – Amid the record-shattering profits oil and gas companies have been recording – President of the United States of America, Joe Biden on Monday threatened to increase the tax on the oil majors ‘outrageous’ profits.
President Biden statement comes days after American oil giant, ExxonMobil Corporation announced that its third-quarter 2022 earnings was US$19.7 billion – and oil companies like British oil giant Shell and others also recording big profits.
The U.S President reiterated that the ongoing war between Russia and Ukraine has sent oil prices soaring, not just in America, but around the world.
“One by one major oil companies have reported record-breaking profits not just a fair turn-out for hard work…but I mean profits so high it’s hard to believe,” the President said.
Biden noted, “Last week Shell announced that it made US$9.5B in profits for the third quarter that’s almost twice as much it made in the third quarter of last year and I think that’s something…I think that was as high as its going to get and then along came Exxon.”
He explained that Exxon’s profit for the third quarter of 2022 is nearly triple what the oil major made last year and the most profit made in its 152 year history.
The U.S President added that within the last six months, six of the largest oil companies have made more than US$100B in profits. He then stated that he thinks the profits made by the oil giants are outrageous.
“Give me a break, enough is enough, look I’m a Capitalist and I have said this before, I have no problem with corporations turning a fair profit and getting a return on their investment and innovation, but this is not remotely what’s happening. Oil companies’ recording profits today are not because they are doing something new or innovative, their profits are a windfall of war,” he explained.
As such, he noted that, at the time of war any company receiving historic profits like the oil majors are recording, have the responsibility to, “act beyond their narrow self-interest of its executive shareholders.”
“I think they have the responsibility to act in the interest of its consumers, their community and their country. To invest in America by increasing production and refining capacity because they don’t want to do that they have the opportunity to do that,” the President said.
President Biden explained that the oil companies can also lower the prices for consumers at the pump stations, to bring ease to Americans. However, he stated, if the oil companies who are raking in billions in profits fail to act they will face higher taxes on their excess profits and other restrictions. He added that his team will work with Congress to look at the options available and will provide an update when Congress gets back.
“It’s time for these companies to stop war-profiteering. Meet their responsibilities to this country, give the American people a break and still do very well,” he said.
President Biden’s statement on the taxing of the oil companies big profits – comes at a time when Exxon’s affiliate Esso Exploration and Production Guyana Ltd (EEPGL) is enjoying tax-free profits in Guyana.
EEGL is the operator of the country’s richest oil block and continues to enjoy tax-free earnings owing to the Production Sharing Agreement (PSA) Guyana signed onto with the oil major.
Under the 2016 PSA Guyana has agreed to, under the taxation provisions, to pay Exxon’s share of Corporation and Income Tax. As such it would mean, that Guyana foregoes each year, billions of US dollars.
Guyana’s Stabroek Block is 6.6 million acres (26,800 square kilometers) and has approximately 11 billion proven barrels of oil. EEPGL holds 45% interest in the Block. Hess Guyana Exploration Ltd. holds 30% interest, and CNOOC Petroleum Guyana Limited holds 25% interest.
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