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Output down, but profits hit new record
OIL GIANT Shell, the world's second biggest quoted oil company, has just recorded the largest annual profits in British corporate history. At a time when world economies are on the brink of recession, Shell made $27.6 billion (£14 billion) profit for 2007 - that's £1.5 million an hour.
ExxonMobil, the world's biggest oil company, also announced the biggest profits by one company ever - $40 billion. BP's profits actually fell by 22%, though they are still increasing their dividends. None of these companies has produced any more oil or gas - in fact Shell's production slid down for the fifth year running and it cannot predict its output for 2008.
Shell is investing less in exploration than previously and far from investing much in renewable sources of energy production as it promised, they are now concentrating on environmentally damaging projects, such as in Canada's oil sands and into exploitation of Iraq's oil resources.
Shell increased the profits stream into shareholders' pockets largely by putting petrol prices at its pumps up to over £1 a litre.
Both trade unions and environmental groups have called the energy industry's profit levels 'obscene' and want a windfall tax to allow the government to lower prices for millions of people who cannot afford to heat their homes and also to invest in improving energy efficiency.
An immediate windfall tax on Shell's profits would help, but the best long-term solution is to bring these companies into public ownership.
DESPITE ITS record profits, Shell is accused by workers on five North Sea oil platforms of a "severe lack of commitment to safety".
In 2006 and 2007 fires broke out on two Shell platforms and a third narrowly avoided an explosion. A worker, speaking anonymously to Channel 4 News, said that on the Cormorant Alpha platform five safety valves on the main gas pipeline were leaking. But the company wouldn't shut down production to rectify the fault.
It was 20 years ago this summer that the Piper Alpha platform exploded killing 167 workers.
In The Socialist 6 February 2008:
War and terrorism
Socialist Party women
Socialist Party news and analysis
Young workers and Students
Environment and socialism
Socialist Party debate
International socialist news and analysis