TotalEnergies Reports Record Annual Profit of $21.4 Billion Despite Environmental Controversies

totalenergies reports record annual profit of 21 4 billion despite environmental controversies
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French energy giant TotalEnergies announced on Wednesday its highest-ever profit for the year 2023, reaching $21.4 billion, marking a four percent increase from the previous year. Despite facing criticism and ongoing legal battles over its environmental practices, the company’s robust performance was attributed to strong performances in its liquefied natural gas and electricity divisions, alongside heavy investments in fossil fuel production.

TotalEnergies’ net profit surpassed that of global competitors such as Shell, BP, Exxon-Mobil, and Chevron, all of which reported lower earnings amid weaker energy prices. However, the company’s 2022 net profit had been impacted by a significant exceptional charge of $15 billion due to its withdrawal from Russia following the country’s invasion of Ukraine.

Adjusted net profit for 2023 saw a notable downturn, falling by 36 percent to $23.2 billion, particularly in the fourth quarter where adjusted net operating income from business segments dropped by 31 percent. This decline was attributed to a 10 percent average drop in oil and gas prices compared to 2022 when prices were inflated.

Despite the strong financial performance, TotalEnergies’ net profit figure for 2023 fell short of analysts’ forecasts, leading to a slight dip in the company’s share price. The company’s diversification efforts towards low-carbon electricity production have been overshadowed by ongoing criticism from environmental groups regarding its continued investments in fossil fuels.

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TotalEnergies faces pending court cases, particularly concerning its land acquisition practices for controversial projects in Uganda and Tanzania, including the Tilenga drilling project and the East African Crude Oil Pipeline (EACOP). These projects have raised concerns among environmentalists due to their potential impact on fragile ecosystems.

While TotalEnergies has emphasized its commitment to transitioning to low-carbon production, critics note a lack of emphasis on renewables in the company’s recent statements. Despite this, TotalEnergies has proposed a 7.1 percent increase in its annual dividend paid to shareholders for 2023, alongside a $9 billion share buyback initiative, indicating a focus on shareholder returns amidst environmental controversies.

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