(London) Oil giant Royal Dutch Shell said on Monday it would drop an after-tax charge of $ 3.5 billion to $ 4.5 billion for write-downs and restructuring amid bleak outlook for the oil industry.
Posted on December 21, 2020 at 7:42 a.m.
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The adjusted results of oil and gas drilling activities should show a loss “in view of the current context for oil prices”, underlines in particular Shell in a press release. Prices have fallen sharply this year due to the coronavirus pandemic which has caused demand for hydrocarbons to collapse.
Shell recalls that its cash flow reacts to changes in oil and gas prices to the tune of $ 6 billion per year per change of ten dollars.
A barrel of Brent listed in London was worth around $ 50 on Monday, more than ten dollars less than last year at the same time, and the New York-listed WTI was trading around $ 47 a barrel.
Oil and gas production is also expected to have suffered from a hurricane in the Gulf of Mexico and mild weather in northern Europe in the first half of the fourth quarter, the statement said.
The group points out that the use of its refineries should be between 72% and 76% over the quarter, indicating weak demand.
The hydrocarbon giant had returned to the green in the third quarter and intends to reward its shareholders, after an abysmal loss in the previous quarter due to the collapse of prices caused by the pandemic.
Like its competitor BP, Shell has been forced to launch a deep restructuring which should allow it to adapt to lower prices and to fulfill its objective of “greening” its activities and achieving carbon neutrality by 2050.
Shell in particular wants to drastically reduce its costs, which means cutting 7,000 to 9,000 jobs by 2022.
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