© Reuters. FILE PHOTO: Exxon Mobil logo and stock graph are seen through a magnifier displayed in this illustration taken September 4, 2022. REUTERS/Dado Ruvic/Illustration
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By Sabrina Valle
(Reuters) – U.S. oil major Exxon Mobil Corp (NYSE:XOM) is suing the European Union in a bid to force it to scrap the bloc’s new windfall tax on oil groups, arguing Brussels exceeded its legal authority by imposing the levy.
Record profits this year by oil companies benefiting from high energy prices have boosted inflation around the world and led to fresh calls to further tax the sector.
The windfall profits tax is “counter-productive,” discourages investments and undermines investor confidence, Exxon spokesperson Casey Norton said on Wednesday. Exxon will factor in the tax as it considers future multibillion-euro investments in Europe’s energy supply and transition, he said.
“Whether we invest here primarily depends on how attractive and globally competitive Europe will be,” Norton said.
GRAPHIC: Big Oil’s big profit (https://globalrubbermarkets.com/wp-content/uploads/2024/08/exxon-sues-eu-in-move-to-block-new-windfall-tax-on-oil-companies.png)
The Financial Times first reported the lawsuit on Wednesday.
Windfall profit taxes imposed by Europe could cost at least $2 billion through the end of 2023, Chief Financial Officer Kathryn Mikells said in a call to analysts on Dec. 8.
Exxon said it invested $3 billion in the past decade in refinery projects in Europe. The projects are helping it deliver more energy products at a time when Europe struggles to reduce its imports from Russia, the company said.
“We will continue to work with EU leaders to address these issues. Thoughtful policy is critical,” the company said.
Chevron Corp (NYSE:CVX) had also warned that taxing oil production would serve only to reduce energy supply by discouraging company investments.
“That goes against the intent of increasing suppliers and making energy more affordable,” Chevron’s chief financial officer, Pierre Breber, told Reuters in October.
Source: Investing.com
