Oil companies may be the next industry to repatriate foreign earnings to take advantage of tax changes

Houston Chronicle:

U.S. oil companies, most with headquarters or significant operations in Houston, have more than $150 billion in foreign earnings, much of which is cash they could bring back into the United States at favorable tax rates under the recently enacted federal tax overhaul.

It remains unclear how much the oil companies might bring back home and what they might do with it. But sweeping changes in the corporate tax system have provided incentives for companies to bring overseas earnings, estimated at some $3 trillion, into the United States, and some are taking advantage of it.

Under the previous tax law, U.S. companies could avoid paying taxes on foreign earnings by keeping it abroad. The new system imposes taxes on foreign earnings, but U.S. companies are allowed a one-time tax of 15.5 percent for repatriated cash -- far less than the 35 percent they would have paid under the old system.

U.S. firms, including Apple and JPMorgan Chase & Co., recently announced they'll make big investments in domestic operations while making multibillion-dollar tax payment bills to repatriate cash. If oil companies followed the lead of Apple and JPMorgan, and invested lumps of cash in the United States, that money would almost certainly end up benefiting Houston's economy.

"The rule of thumb is you're not really going to do a sophisticated drilling job without turning to Houston," said Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston. "If it's spent abroad or spent here, a good share of it would wind up here in the Houston area."

Gilmer noted the $150 billion that oil companies hold in foreign earnings, which could include cash and the value of assets, is almost equivalent to the $175 billion in capital expenditures by the nation's oil producers, refiners and pipeline operators last year.

Exxon Mobil Corp. and Chevron Corp., the two largest U.S. oil companies, together had more than $100 billion in foreign earnings at the end of 2016, according to the most recent regulatory filings data compiled by financial research firm Audit Analytics.
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There is more.

They would be wise to bring it back sooner rather than later because greedy Democrats will want to raise their taxes as soon as they get a chance.  They need to get it back to the US and invest it in production in this country to take advantage of the opportunities the Trump administration has created by opening up more federally control sites to exploration and production.  The sooner the better because the new production would also be taxed at the new lower rate for companies.