February 5, 2008
CONTACT: Judy Dugan, cell: 213-280-0175; Jamie Court, 310-392-0522,
ext. 327 or cell : 310-874-9989; or Tim Hamilton, 360-495-4941
BP, ‘Bumbling Petroleum,’ Is Exception to Profit Boom; Group Warns Against Cutting Safety As It Sheds Jobs
Yearly 2008 Profit Total for Big Five Oil Companies Still Hits $114 Billion, Picking Consumer Pockets Around the World
Santa Monica, CA — BP, the third-largest of the major private oil
companies, capped off yearly Big Oil profit reports with a 4th quarter
whimper in part because of payouts from a 2005 refinery disaster. Yet
without the liability and other one-time costs, BP’s reported profit of
$3 billion for the quarter would have surged to over $4 billion. Thus
even the most hapless of oil giants can cash in on astronomical crude
oil prices, said the Foundation for Taxpayer and Consumer Rights.
The group cautioned that BP’s plan to eliminate 5,000 jobs to
improve profitability could push the company into the same cost-cutting
spiral that investigators blamed for the deaths of 15 workers at its
Texas City, Texas, refinery in 2005. (Click here to see links to investigative reports.)
"BP’s earlier excessive penny-piinching on both safety and
maintenance was blamed for the Texas City disaster and its Alaska
pipeline shutdown in 2006," said Judy Dugan, research director of the
Foundation for Taxpayer and Consumer Rights. "The company says it is
only cutting corporate jobs, but since safety oversight is not a profit
center, BP risks the same bad judgment that led to Texas City. BP seems
stuck like Bill Murray in ‘Groundhog Day,’ except that the movie
weatherman didn¿t kill 15 workers."
BP’s profit for the year was reported at $17.5 billion.
FTCR, looking at the combined $114 billion in yearly profits for
the five major private oil companies, also called for government action
to curb rampant speculation and trim tax subsidies.
"Between billions of dollars in U.S. taxpayer subsidies and
the absurd, trader-driven price of crude oil in the last quarter,
making record profits was as easy as stealing from a baby for most of
the oil industry," said Judy Dugan, research director of the Foundation
for Taxpayer and Consumer Rights. "The crime victims in these profits,
however, are whole economies and their debt-laden taxpayers."
A measure to recoup about $14 billion of U.S. tax subsidies to
oil companies as part of the energy bill failed in the Senate last year
by one vote, facing all-out lobbying by oil companies. Aside from
revisiting the subsidy issue, FTCR urges Congress to require oversight
of unregulated electronic energy trading markets, which drove up the
price of oil on sheer speculation. (Click here for more background.)
Crude oil prices have retreated after touching $100 a barrel,
but even $88 is far too high, considering flat or declining demand
worldwide, said the nonprofit, nonpartisan FTCR.
The major oil companies participate in speculative energy
markets even as they cluck disapprovingly about speculation, said FTCR.
Now, as the price of oil sinks slightly, they will push to make up the
difference with bigger profits on refining gasoline.
"Consumers have a right to be wondering why their government is missing in action," said Dugan.
(Charts below will be updated with BP 4th quarter data by 1 p.m. EST)
View FTCR’s chart of yearly profits since 2000 of Exxon, Shell, BP and Conoco.
(The chart takes into account companies that merged after 2000, such as
Chevron and Unocal in 2005, to give the fairest picture of oil profit
View more charts and FTCR’s "Oil Profits Monster" Excel database,
developed by independent oil analyst Tim Hamilton. It shows profits by
quarter and by sector, as well as annual profits and gasoline and crude
oil price data:
– 30 –