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Exxon Mobil Corp has said it will be taking a look at the oil supermajor’s role in Europe in light of the new windfall profit taxes.
Exxon’s Chief Executive Darren Woods made the announcement during a CERAWeek panel on Tuesday, adding that the windfall profit taxes serve to discourage investments. Meanwhile, the U.S. supermajor is sinking more money into its U.S. operations.
He referred to Europe’s windfall tax move as the proverbial “stick” in the carrot and stick scenario. Meanwhile, back home in the United States, the Inflation Reduction Act has enticed Exxon to create a new clean energy business venture—a substantial one at that--with CF Industries and Enlink Midstream in Louisiana that Exxon says is only the tip of the iceberg of backlogged projects that will likely now move forward with a quickness.
“I think you may be very simply to describe it as carrots versus sticks,” Woods said in reference to the US Inflation Reduction Act versus Europe’s new tax scheme. “We certainly step back and reevaluate what we are doing in Europe. The IRA is obviously very important for your strategy.”
Exxon is one of Europe’s largest oil and gas producers and a major refiner of crude oil, owning some of the continent’s largest refineries, including Belgium’s Antwerp Refinery, the UK’s Fawley Refinery, and France’s Port Jerome-Bravenchon Refinery.
ExxonMobil filed a lawsuit against the EU over the 33% windfall tax in December after claiming that the windfall tax could cost the company $2 billion in 2023. Exxon argued that the tax would end up being a destructive force for investor confidence. “Whether we invest here primarily depends on how attractive and globally competitive Europe will be,” Exxon spokesperson Casey Norton said shortly after the lawsuit was filed.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.