[ad_1]
- Shell became the last major oil company on Thursday to reveal huge annual losses as the coronavirus pandemic reduced energy demand and prices in 2020.
- Although hopes for an economic recovery have been boosted by the start of vaccine launches, Shell said that “there remains significant uncertainty in macroeconomic conditions, with an expected negative impact on demand for oil, gas and products. related “.
- The company suffered a net loss of $ 21.7 billion last year when factories closed and planes were grounded.
Royal Dutch Shell became the last major oil company on Thursday to reveal huge annual losses as the coronavirus pandemic slashed energy demand and prices in 2020.
Shell plunged into a net loss of $ 21.7 billion (~ R327 billion) last year when factories closed and planes were grounded.
The Anglo-Dutch group’s loss compared to a net profit of $ 15.8 billion in 2019, the company said in a statement.
“2020 was an extraordinary year,” said CEO Ben van Beurden.
“We have taken tough but decisive action,” he said, and Shell had already announced plans to cut up to 9,000 jobs, or more than 10% of its global workforce.
‘Ugly numbers’
Shell’s results and large job cuts mirror the situation in other parts of the energy sector.
Britain’s rival BP, which is cutting around 10,000 jobs, reported a net loss of $ 20.3 billion in 2020 on Tuesday.
US giant Exxon Mobil suffered a loss in 2020 of $ 22.4 billion, while for Chevron it was $ 5.5 billion.
“Recent results from other major oil companies paved the way for an uncomfortable reading and Shell’s results contain some disagreeable numbers,” said Richard Hunter, director of markets at Interactive Investor.
“The pandemic has clearly had a severe impact on performance and the price of oil in particular.
“The dual effect of oversupply and paralyzed demand when planes went idle, travel was reduced to a minimum and manufacturing nearly ceased during the shutdown has been shown in these numbers,” Hunter added.
After the lockdowns began to extend towards the end of the first quarter of last year, oil prices fell off a cliff, even briefly turning negative.
However, prices rebounded sharply, and on Thursday the benchmark contract for Brent oil in the North Sea was approaching $ 60 a barrel.
Although hopes for an economic recovery have been boosted by the start of vaccine launches, Shell said that “there remains significant uncertainty in macroeconomic conditions, with an expected negative impact on demand for oil, gas and products. related “.
However, Shell said it expects to increase its first quarter dividend by 4%.
Last year he cut his dividend for the first time since 1945.
Meanwhile, massive losses for energy companies come as they accelerate plans to transition to greener energy, which requires large investments at a time when Big Oil seeks to make considerable savings.
“The ability of these large companies to adapt to the prospect of having to restructure their business in a lower demand world, as well as to adapt to a fast-paced green agenda, would pose challenges for an ordinary business, let alone one that relies on fossil fuels for power generation – their business model, “said Michael Hewson, chief market analyst at CMC Markets UK.
