Shell says will take up to $22 billion hit from coronavirus

LONDON — Anglo-Dutch energy giant Royal Dutch Shell will take a vast second-quarter charge of up to $22 billion due to coronavirus and collapsing oil prices, it announced Tuesday.

The company said in a statement that it would face a charge of between $15 billion and $22 billion in the second quarter, after reviewing chronic fallout from the deadly COVID-19 outbreak that crashed global demand for energy.

"In the second quarter of 2020, Shell has revised its mid and long-term price and refining margin outlook reflecting the expected effects of the COVID-19 pandemic and related macroeconomic as well as energy market demand and supply fundamentals," the London-listed firm said.

"This has resulted in the review of a significant portion of Shell's upstream, integrated gas and refining assets." 

The energy major added that the move also reflected a planned reshaping of refining activities as it seeks to move towards becoming carbon neutral by 2050.

Shell's announcement comes after rival BP revealed earlier this month that it was taking a hit of between $13 billion and $17.5 billion in the same period as a result of "sustained" coronavirus fallout that ravaged the world's appetite for oil.

Agence France-Presse

Shell cuts dividend for first time since 1940s as oil demand collapses

LONDON - Royal Dutch Shell cut its dividend for the first time in 80 years and suspended the next tranche of its share buyback program on Thursday following the collapse in global oil demand due to the coronavirus pandemic.

"Given the continued deterioration in the macroeconomic outlook and the significant mid and long-term uncertainty, we are taking further prudent steps to bolster our resilience, underpin the strength of our balance sheet and support the long-term value creation of Shell," Chief Executive Ben van Beurden said in a statement.

Starting in the first quarter, Shell will reduce its quarterly dividend to 16 cents per share from 47 cents in the previous quarter.

For decades, Shell has taken pride in having never cut its dividend since the Second World War, resisting such a move even during the deep downturns of the 1980s.

Shell's first-quarter net income attributable to shareholders based on a current cost of supplies (CCS) and excluding identified items, fell 46 percent from a year earlier to $2.9 billion, above the consensus in an analyst survey provided by the company.

Shell's fourth-quarter net income was also $2.9 billion.

The company said it cut activity at its refining business by up to 40 percent in response to the demand shock. 

-reuters-

Shell buys German battery maker Sonnen

LONDON - Anglo-Dutch oil giant Royal Dutch Shell agreed Friday to buy German rechargeable battery maker Sonnen, as the sector eyes growing demand for cleaner energy.

Shell, which already invested in the German start-up in May 2018, revealed in a statement that it would buy 100 percent of Sonnen for an undisclosed amount.

Sonnen, which makes lithium-ion batteries for storing wind and solar power, was founded in 2010 and has since grown rapidly to become a dominant player in Europe.

"Sonnen is one of the global leaders in smart, distributed energy storage systems and has a track record of customer-focused innovation," said Mark Gainsborough, executive vice president of Shell's New Energies division.

"Full ownership of Sonnen will allow us to offer more choice to customers seeking reliable, affordable and cleaner energy.

“Together, we can accelerate the building of a customer-focused energy system in support of Shell's strategy to offer more and cleaner energy solutions to customers," he added in the statement.

Friday's announcement shows how the traditional oil sector is seeking to diversify further into greener energy, analysts say.

The announcement is "100 percent a sign that oil majors are positioning for green energy," said Neil Wilson at Markets.com.

In June 2018, Shell's main British rival BP bought Britain's largest electric vehicle-charging firm Chargemaster, in a bet on booming demand for greener transport.

source: news.abs-cbn.com

Oil tops $60 for first time in 2015

LONDON - Oil rose above $60 a barrel on Friday for the first time this year, bringing its gain this week to almost 4 percent, supported by signs that deeper industry spending cuts may curb excess supply.

Also supporting oil, growth in Germany's gross domestic product beat expectations, as did plans for a meeting between Greek officials and creditors. Euro zone GDP data is due later on Friday.

The price of Brent crude collapsed from $115 in June to $45.19, the lowest in almost six years, in January due to oversupply. Since January, mounting signs of lower industry spending have helped prices move higher.

Apache Corp, a top U.S. shale oil producer, said on Thursday it would cut capital spending and its rig count in 2015 following the price collapse, keeping its output growth mostly flat.

Brent for April delivery was up 76 cents at $60.04 by 0917 GMT, after briefly gaining more than $1. The March contract expired overnight. U.S. crude was up 61 cents at $51.82.

"During the last weeks, crude oil rebounded driven by improved market sentiment and by expectations that low prices will lead to lower supply growth in 2015," said Daniela Corsini, analyst at Intesa Sanpaolo, in a report.

Besides Apache's update, Royal Dutch Shell's chief executive said on Thursday supply might not be able to keep up with growing demand as companies reduce budgets, and France's Total announced investment and job cuts.

Still, analysts at JBC Energy in Vienna pointed out in reference to Apache's moves that spending cuts can easily be reversed.

"While the company expects North American onshore production to be flat this year, they emphasise their flexibility to come back very quickly if the price environment or the cost structure changes sufficiently," JBC said.

"This is generally what makes most people doubt that the latest rally can be sustained."

A weaker U.S. dollar, which makes dollar-denominated commodities cheaper for holders of other currencies, has also supported oil this week, analysts say.

source: www.abs-cbnnews.com

Shell annual profits jump to $30.9 billion

LONDON - Energy giant Royal Dutch Shell said Thursday that its 2011 net profit jumped by 54 percent to $30.92 billion (23.5 billion euros) on the back of higher energy prices.

The profit after tax figure compared with net income of $20.47 billion during 2010, Shell said in a results statement.

However, the Anglo-Dutch group also revealed that net profits slipped four percent to $6.5 billion in the fourth quarter, or three months to the end of December, compared with same part of 2010.

Excluding changes to the value of its energy inventories, Shell added that annual profit also soared 54 percent to $28.6 billion last year.

Production slid three percent however to 3.215 million barrels of oil equivalent per day last year.

Shell is meanwhile set to invest $30 billion into new investment projects to boost the company's growth. The group said its 2012 outlook was boosted by more than 60 new projects and options.

"I am pleased with our delivery in 2011, focusing on improving our operating performance and ramping up our growth projects," said chief executive Peter Voser in the earnings release.

"We have made good progress with portfolio development during 2011, with new opportunities in global gas, liquids-rich shales and exploration, alongside some $7.5 billion of divestments as part of Shell's drive for on-going capital efficiency and portfolio improvement."

He added: "Our fourth-quarter results were impacted by a sharp downturn in industry refining margins and North American natural gas prices.

"The global economy and energy markets are likely to see continued high volatility. Despite the near-term uncertainties, Shell's focus remains on through-cycle investment for sustainable growth."

In recent years, Shell has outshone troubled rival BP -- which has been ravaged by the 2010 Gulf of Mexico oil spill disaster -- and underlined its confidence Thursday by promising dividend growth for the first time since 2009.

Shell said it would raise its dividend by two percent for the first time in three years from next quarter. However, this was lower than the 4.0-percent hike that most analysts had expected.

source: interaksyon.com