Profits of energy companies drop in the first half of 2023

Key takeaways:

– 2022 was an exceptional year as oil prices soared while gas prices in Europe reached record levels. This has translated into record profitability for many energy companies.

– This year profits have receded following the drop in prices but this doesn’t mean that companies are financially struggling. The prices that oil is currently trading at are high and still enable companies to register high profits.

– Some companies performed worse than others for several reasons including the composition of their portfolio, investment, and taxes among others.

– Biden’s approach to the US oil and gas industry is controversial. On one hand, the president criticised the companies for registering record profits in 2022, but at the same time he urged them to produce more. The only way to bring in more supplies is by increasing investment and that will be achieved when a supportive policy is pursued.

– Various oil and gas companies, including international and national oil companies,  are adopting strategies that incorporate the use of renewable energy sources as they come to the realization that they cannot continue with the traditional approach of only investing in fossil fuels. They are also investing in green technologies such as Carbon Capture and Storage (CCS) that could help reduce the carbon footprint of their activities.

– Even under the most aggressive climate scenarios, oil and gas will still play a role in the world’s energy mix for many years to come.