Friday, February 01, 2008

Shell and £13.8bn profit

I was going to do this yesterday, but I felt the meeting report deserved to stand-alone.

As you may or may not have heard Shell have announced profits of £13.8 billion pounds the most any British company have ever done. This of course made the news and likewise of course prompted the usual rounds of 'excess profit' mumblings. So, odd as it may seem, here I am to defend them.

First off we don't like show-offs, the Harry Enfield "Loads'a'money" character demonstrated this, so Shell shoving its wad in our faces irks. Except they're not doing that the media are, Shell have an obligation to announce their profits it's the media who made a big deal of this they're the ones metaphorical standing in front of the company and shouting "I could buy you, I could buy you, I could buy two of you". so blame the media.

Secondly is the accusation of 'excessive profit' or more unflattering terms. They're a company, their one mantra is "Make money" so there's no such thing as excessive profit, only profit. Not trying to be sidetracked, but this tends to lead to the question posed by Michael Moore "Why don't GM sell crack-cocaine?" it's a highly profitable business after all and if all they're interested in is making money it's a good business. Except it's not, the chances of getting caught and the penalties attached outweigh the amount of money they could make and you can't follow The One Mantra very easily from prison or with a disincorporated company. If on the other hand they can get away with and/or the penalties are light then companies have been seen to break the law, from dumping toxic waste to cooking the books.

Thirdly we hit the real grievance, this is a petrol company and petrol is currently over £1/litre (about $3.78/gallon for my USA friends). See, see how much money they're making from us and (as per point one) they're just rubbing our faces in it; except they're not. Of that £1 approximately £0.70 goes straight to the Treasury in tax; the companies are making pennies out of the pound. Sure they add up, but the majority is being made elsewhere in ways we don't even see.

There are plenty of reasons to bash Shell (and every other oil firm) this just isn't one of them.