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Chevron buys back $75 billion in stock after record profits

(Bloomberg) — Chevron Corp . plans to buy back $75 billion in shares and increase dividend payments after a year of record profits that drew angry condemnations from politicians around the world as skyrocketing energy prices squeezed consumers.

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The share buyback program will start on April 1 and will be three times the size of the previous authorization unveiled in early 2019, the company said in a statement on Wednesday. The program corresponds to almost a quarter of the company’s market value and five times the current level of annual buybacks.

Although Chevron̵[ads1]7;s plan pales in comparison to the $89 billion that Apple Inc. committed to buybacks over the past year, it is likely to inflame critics who have accused the oil industry of war profiteering after Russia’s invasion of Ukraine sent energy prices soaring.

President Joe Biden was among those who outsourced oil explorers to use money for shareholder-friendly initiatives like dividends and buybacks instead of plowing it into more drilling that would boost crude supplies. Chevron rose as much as 3.9% in after-market trading.

“For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders in a strange way is a strange way to show it,” Abdullah said Hasan, a White House spokesman. in a statement Wednesday evening. “We continue to urge the oil companies to use their record profits to increase supply and lower costs for the American people.”

The company will also pay investors a dividend of $1.51 per share on March 10, a 6.3% increase from the previous quarter.

Although energy prices have retreated since the early stages of Russia’s attack on Ukraine, analysts expect U.S. oil companies’ profits to remain strong because they have kept investment spending in check, unlike past booms. Instead, the windfall has been used to repay debt and boost investor returns.

Chevron increased share buybacks several times last year as oil prices rose, but CFO Pierre Breber has vowed to maintain the buyback rate even as commodity prices retreat. With net debt currently below the company’s target range, Chevron is willing to allow debt levels to increase to continue buying back shares if necessary, Breber said last year.

The company announced last year that capital spending for 2023 would be at the top of its guidance range of $17 billion. Chevron is scheduled to report results for the fourth quarter on January 27.

–With assistance from Tom Contiliano and Justin Sink.

(Updates with the reaction from the White House, in the fifth section.)

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