The oil giant Royal Dutch Shell massively devalued the value of its assets due to the impact of the coronavirus on demand and lasting market changes, two weeks after a similar measure by its rival BP.
It will drop an asset impairment charge of $ 15 billion to $ 22 billion in its second quarter accounts to reflect the much darker outlook than before for black gold prices and production margins due to ” the impact of the COVID-19 pandemic, ”he said in a statement.
The virus has forced governments around the world to shut down their economies, melting demand for energy, coupled with chronic overproduction and long-term demand for climate change and in turn on the price of black gold.
The group now tables on a barrel on average at 35 dollars this year, a price generally not allowing the “majors” to generate profits.
The price of crude oil started 2020 around 60 dollars before plunging from March, even falling briefly into negative territory for the first time in its history in April.
Disagreements within OPEC, the organization of the oil-exporting countries, and its OPEC + allies including Russia, only exacerbated these trends in March before an agreement to limit demand and attempt to support black gold prices.
According to David Madden, CMC Markets analyst interviewed by AFP, these impairments augur of a “huge loss” in the second quarter.
In the first quarter, Royal Dutch Shell had already fallen into the red because of the plunge in crude prices in March, which had led it to reduce its dividend for the first time since the 1940s.
For Nicholas Hyett, an analyst at Hargreaves Lansdown, the question now is whether “Shell is sufficiently pessimistic”.
Two weeks ago, Shell rival BP had already announced $ 13.5 billion to $ 17.5 billion in write-downs for the same reasons, after unveiling a plan to cut 10,000 jobs worldwide to reduce its scope and adapt to an environment less favorable to crude oil, especially since it is committed to achieving carbon neutrality in 2050, without having yet explained how to achieve it.
“Shell is finally realizing what activists and informed investors have argued for years: the climate emergency will reduce the value of oil,” reacted the environmental organization Greenpeace. She adds that Shell boss Ben van Beurden “must now move towards renewable energy to protect the future of the planet and that” of the group.
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