ExxonMobil, a major US energy company, is suing the European Union (EU) to stop its new windfall tax on oil companies. Firms that benefited from something they were not responsible for must pay a windfall tax.
Due in part to supply concerns following Russia's invasion of Ukraine, energy companies are receiving much more money for their oil and gas. Exxon, however, has criticized Brussels for going beyond its legal authority and called the action "counter-productive."
ExxonMobil announced a nearly $20 billion quarterly profit in October.
However, the company and other significant players in the oil and gas industry have argued that a crackdown would deter investment.
Ursula von der Leyen, the European Commission's chief executive, announced in September an emergency plan for major oil, gas, and coal companies to pay a "crisis contribution" on their increased 2022 profits.
The government announced a 33% tax on this year's profits, which were more than 20% higher than the three previous years' average.
Exxon has also argued in a challenge filed at the EU's Luxembourg-based General Court that the levy undermines investor confidence.
"Whether we invest here primarily depends on how attractive and globally competitive Europe will be," Exxon spokesperson Casey Norton told the Reuters news agency.
ExxonMobil's chief financial officer estimated that the EU tax would cost the company "over $2 billion" at an investor meeting earlier this month.
Exxon's lawsuit has been "taken note of" by the European Commission.
Its spokeswoman said in a statement on Thursday that the case would now be decided by the General Court.
"The Commission maintains that the measures in question are fully compliant with EU law," Arianna Podesta said in a statement.
In the aftermath of Ukraine's invasion, the EU is attempting to wean itself off Russian energy, but this has left it scrambling for alternative sources.
EU ministers estimate that levies on non-gas electricity producers and suppliers who are profiting more than usual from current levels of demand can raise €140 billion.
(Source:www.business-standard.com)
Due in part to supply concerns following Russia's invasion of Ukraine, energy companies are receiving much more money for their oil and gas. Exxon, however, has criticized Brussels for going beyond its legal authority and called the action "counter-productive."
ExxonMobil announced a nearly $20 billion quarterly profit in October.
However, the company and other significant players in the oil and gas industry have argued that a crackdown would deter investment.
Ursula von der Leyen, the European Commission's chief executive, announced in September an emergency plan for major oil, gas, and coal companies to pay a "crisis contribution" on their increased 2022 profits.
The government announced a 33% tax on this year's profits, which were more than 20% higher than the three previous years' average.
Exxon has also argued in a challenge filed at the EU's Luxembourg-based General Court that the levy undermines investor confidence.
"Whether we invest here primarily depends on how attractive and globally competitive Europe will be," Exxon spokesperson Casey Norton told the Reuters news agency.
ExxonMobil's chief financial officer estimated that the EU tax would cost the company "over $2 billion" at an investor meeting earlier this month.
Exxon's lawsuit has been "taken note of" by the European Commission.
Its spokeswoman said in a statement on Thursday that the case would now be decided by the General Court.
"The Commission maintains that the measures in question are fully compliant with EU law," Arianna Podesta said in a statement.
In the aftermath of Ukraine's invasion, the EU is attempting to wean itself off Russian energy, but this has left it scrambling for alternative sources.
EU ministers estimate that levies on non-gas electricity producers and suppliers who are profiting more than usual from current levels of demand can raise €140 billion.
(Source:www.business-standard.com)
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