U.S. oil major Exxon Mobil is suing the European Union in a bid to force it to scrap the bloc’s windfall tax on oil groups, Reuters news report said.
Exxon Mobil feels that the European Union exceeded its legal authority by imposing the levy.
Several oil companies achieved record profits this year by benefiting from increase in energy prices.
The windfall profits tax is counter-productive, discourages investments and undermines investor confidence, Exxon spokesperson Casey Norton said. Exxon will factor in the tax as it considers future multibillion-euro investments in Europe’s energy supply and transition.
Windfall profit taxes imposed by Europe could cost at least $2 billion through the end of 2023, Chief Financial Officer Kathryn Mikells said in a call to analysts on Dec. 8.
Exxon said it invested $3 billion in the past decade in refinery projects in Europe. The projects are helping it deliver more energy products at a time when Europe struggles to reduce its imports from Russia.
Chevron had also warned that taxing oil production would serve only to reduce energy supply by discouraging company investments.
“That goes against the intent of increasing suppliers and making energy more affordable,” Chevron’s chief financial officer, Pierre Breber, said in October.