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NEW YORK (CNN/Money) -
Even as oil profits have soared on higher energy prices, the tax rate paid by many of the nation's largest oil companies are falling, according to a published report.
The Wall Street Journal reported Monday that almost one large oil company in four saw its global tax rate decline over the last 12 months, according to the companies' third quarter earnings reports.
The report derived tax rates by dividing the amount of income tax paid by taxable income for 87 publicly traded oil companies with a market capitalization of more than $1 billion.
Among those paying a lower tax rate Royal Dutch Shell's (Research) tax rate fell to 37 percent from 41 percent, BP's (Research) declined to about 27 percent from more than 30 percent, and Burlington Resources (Research) dropped to about 33 percent from 37 percent.
A Shell spokesman told the paper the company wouldn't discuss why its tax rate changed because the information was "commercially sensitive." Burlington spokesman James Bartlett told the paper the drop in the company's tax rate "could well be reversed in the fourth quarter." A BP spokesman declined to comment, according to the report.
All told the paper reported that 21 of the 87 companies examined had lower tax rates for the 12-months ending in the third quarter.
Oil and gas companies in the Standard & Poor's 500 index saw their third quarter earnings rise about 62 percent to about $25.9 billion, according to earnings tracker First Call, and full-year profits are expected to be up nearly 50 percent to $97.7 billion, according to current forecasts.
The paper reports that a company's tax rate can rise or fall because of tax credits, settlement of tax cases, changes in currency values, reinvestment strategies and operating losses.
For example, a spokeswoman for Murphy Oil Corp. (Research), an energy producer and retailer based in El Dorado, Ark., told the paper that its tax rate declined from 38 percent to 36.9 percent due changes in exploration costs related to its efforts in Africa and in deep water off Malaysia. Even with the lower tax rate the company paid $131 million in taxes in the third quarter, or $50 million more than a year earlier.
Still the report of lower tax rates at many companies come as a politically sensitive time for the oil industry. On Nov. 9 top executives from five oil companies, including BP and Shell, appeared before a joint Senate hearing looking at oil prices and profits, facing sometimes hostile questions and comments from the senators. Some senators suggested that tax cuts passed earlier this year for smaller refiners as part of the nation's energy bill should be rolled back in the current environment.
Some senators have voiced support for a so-called "windfall profit tax" on the recent rise in oil company income, or have called on the oil companies to voluntarily contribute more to funds that are designed to help the poor pay heating bills this winter.
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For a look at proposals for a windfall profit tax on oil companies, click here.
For a look at the Senate hearing into oil profits and prices, click here.
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