World, As Seen from the most beautiful islands: Ireland and Cyprus

Shell lost $21.7B in the COVID-19 year

S

Oil and gas company Shell has put its biggest loss on the books last year as a result of the coronacrisis. Substantial write-offs during the first lockdown already caused the biggest quarter loss in the company’s history. And Shell hasn’t been able to make up for it. Red figures were written again in the fourth quarter.

In the end, Shell was down 21.7 billion dollars. A year earlier, the British-Dutch company made a profit of USD 15.8 billion.

Shell had a lot of trouble with fewer planes flying, fewer cars driving and the industry turning into a lower gear. As a result, there was less demand for oil and gas and oil prices collapsed temporarily. They even became negative for the first time, and traders had to pay at some point to get rid of their oil.

Oil market recovery

In the course of the year the oil markets did show recovery, but in many countries new lockdowns were announced later. This pressed fuel sales and the situation also led to lower margins on, for example, refinery products. In the fourth quarter, this resulted in a loss of some USD 4 billion, with results significantly worse than those forecast by analysts in general.

The crisis already forced Shell to take major action. For the first time since the Second World War, dividends for shareholders were reduced. In addition, Shell announced that it would cut 7000 to 9000 jobs worldwide, roughly one tenth of the total workforce. In the Netherlands about 900 jobs are being lost.

“2020 was an extraordinary year”, concludes CEO Ben van Beurden. In his view Shell has taken ‘tough but decisive measures’ and, in spite of everything, has managed to close the year with a stronger balance. He also stressed that Shell is committed to growing the dividend again. For the first quarter of this year, stock exchanges provide about 4 percent more payout per share.

According to Shell, the global demand for oil is now around 5 to 7% below the pre-crisis level. But stock market demand is expected to show a strong recovery in the second half of this year, in order to return to a normal level next year. According to Van Beurden, there will also be a high demand for gas in the coming years, as many countries are moving away from coal energy and seeing a good alternative in gas.

Shell will come up with a new update on its strategy on the transition to renewable energy next week. Critics have long wondered whether Shell is investing enough in wind power, for example. Follow this, an alliance of’ green ‘ activist shareholders, states that if Shell had started the energy transition earlier, the group would probably have been much less affected by this oil crisis.

Add comment

World, As Seen from the most beautiful islands: Ireland and Cyprus

From Trinity st. to Limassol, Cyprus

Ireland and Cyprus have one thing in common. The most beautiful islands are divided. Even proportions are strikingly similar. Both nations strive for unity and a good glass of the news.

Recent Posts

Categories