Big Oil ‘risks being seen as the new tobacco’

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The middle of the Cop26 climate conference was not an ideal moment to boast that the oil business can be “spectacularly lucrative”, said Nils Pratley in The Guardian. Delivering the oil major’s quarterly results following the recent global surge in power prices, BP’s Irish boss Bernard Looney cheerfully described it as “a cash machine”. “

The oil majors risk being seen as the new tobacco,” said Alex Brummer in the Daily Mail. Still, BP is in a better place than its Anglo-Dutch rival Shell, which is “under fire” – both legally and financially. Last week, the giant Dutch pension fund ABP dumped billions of euros in shares as it divested itself of fossil fuel holdings. 

Now a US activist hedge fund, Daniel Loeb’s Third Point, is gunning for break-up. Loeb wants to divide Shell into a legacy oil, refining and chemicals company; and a separate gas and renewables business – surely an exercise in “using climate change as an excuse to try and extort short-term value”. The crucial difference between oil and tobacco producers is that, without oil, the world economy “would come to a shuddering halt”, endangering billions of people. But there’s a moral imperative for Big Oil to use its big coffers “to speed up the path to net zero”. If Shell continues foot-dragging, it risks becoming a “pariah” stock. 

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