The five largest Western oil and gas companies – BP, Chevron, Shell, ExxonMobil, and TotalEnergies, paid shareholders a total of over US$111 billion of their US$123 billion in profits in 2023, Reuters calculations have found.

The collective payouts were slightly higher in nominal terms than 2022, when US$110 was paid, though as a portion of total profits it was much higher, as in 2022 the combined profit of the five firms was US$196 billion. Returning profit to shareholders to such a high extent is interpreted by Reuters as “an attempt to reassure investors of their discipline and resilience in the face of an uncertain outlook for fossil fuels”.

Chevron chief executive Mike Wirth was one who told shareholders something along these lines, saying that during “a time of geopolitical turmoil and economic uncertainty, our objective remained unchanged: safely deliver higher returns and lower carbon”, while Shell CFO Sinead Gorman promised “complete predictability”. Repaying investors to such an extent seems to go against the argument on the part of some energy companies that high profits from fossil fuels are necessary to fund their energy transitions, though this may not necessarily be the case.

Such high returns will help convince many investors to continue to invest in oil and gas, after the sector’s share in the S&P 500 index dropped from around 14% a decade ago to 4.4% in January of this year. Spending on the part of the five companies is not expected to rise much this year, with a source from Moody’s Investor Service telling Reuters that companies “are being more selective and investments face greater hurdles in terms of returns, emissions and regulations.”