(Bloomberg) -- Big Oil is singing the praises of President Donald Trump's tax overhaul but it's not enough: now the rest of the world needs to step up and do the same, according to Chevron Corp.
“Governments around the world will, over time, have to evaluate the competitiveness of their fiscal terms relative to the options that a company like ours would have,” Chief Executive Officer Mike Wirth told analysts on a conference call today.
“We allocate our capital to drive better returns across a global portfolio,” he said in his second day on the job as leader of the world's No. 3 driller by market value. “As these things move around, it's a competitive world and we need to acknowledge that as do others.”
Wirth advocated a low-tax domino effect: one country or state lowers levies, forcing neighbors to do the same or cut even deeper to avoid the loss of jobs and investment. Critics say this strongarms governments into sacrificing revenues to corporations while proponents say lighter tax burdens encourage investment and economic growth.
Chevron will invest where it sees the best returns and tax is a major part of that decision, Wirth said.
“As we have assets around the world, some in fiscal regimes that have not changed for quite some time, those investments become tougher to make frankly,” he said.
Rival supermajor Exxon Mobil Corp. was similarly gushing about the U.S. tax cut earlier this week as CEO Darren Woods praised the “pro-growth business climate here in the U.S.” and announced plans to invest $50 billion over the next five years.
If only it were that simple. When questioned on the figure by analysts on Friday, Jeff Woodbury, Exxon's vice president of investor relations, said it was “a projection.”
“We haven't made a decision to go forward with those investments at this point,” Woodbury said. “But certainly the U.S. tax reform is going to strengthen and build that investment confidence.”
To contact the reporter on this story: Kevin Crowley in Houston at kcrowley1@bloomberg.net.
To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net, Joe Carroll, Carlos Caminada
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