Shell Dives To $18.1bn Loss On Virus-hit Oil Market
Anglo-Dutch energy major Royal Dutch Shell posted Thursday a colossal net loss of $18.1 billion (15.4 billion euros) for the second quarter, blaming massive asset writedowns on the coronavirus-hit oil market, and flagged that job cuts are on the way.
The performance, contrasting sharply with profit after tax of $3.0 billion a year earlier, was sparked by a huge $16.8-billion charge on chronic fallout both from COVID-19 and collapsing oil prices.
The vast charge was taken “as a result of revised medium- and long-term price and refining margin outlook assumptions in response to the COVID-19 pandemic and macroeconomic conditions as well as energy market demand and supply fundamentals,” Shell said in a results statement.
The dire performance meanwhile reflected lower prices for oil, liquefied natural gas (LNG) and gas, while it was also adversely impacted by lower refining margins and oil products sales volumes.
Production dipped six percent to 3.4 million barrels of oil equivalent per day in the reporting period — and is forecast to drop further in the third quarter.
“Shell has delivered resilient cash flow in a remarkably challenging environment,” said Chief Executive Ben van Beurden in Thursday’s statement.
“We continue to focus on safe and reliable operations and our decisive cash preservation measures will underpin the strengthening of our balance sheet.”
And he indicated that job cuts could be on the way in the coming months.
Extracted from Barrons