Shell expects writedowns of between 15 and 22 billion dollars in the second quarter of 2020 due to Covid. What energy companies are deciding to deal with post pandemic accounts
Covid-19 will also affect Royal Dutch Shell's accounts. Due to the crisis triggered by coronavirus, which has also inevitably changed demand and supply on the energy market, the oil & gas giant expects a significant write-down after taxes in the second quarter of the year. All the details.
THE SHELL REVIEW
"In the second quarter of 2020, Shell revised its medium and long-term price and prospects for refining margins, reflecting the expected effects of the Covid-19 pandemic and related macroeconomic aspects, as well as the demand and supply of the 'power. This led to the revision of a significant part of Shell's tangible, intangible and upstream activities, integrated gas and refining ", reads the note released by the company.
DEVELOPMENT IN VIEW
In particular, Shell explains, “aggregate post-tax write-down charges of between $ 15 billion and $ 22 billion are expected in the second quarter. The expenses for impairment are recognized as identified items and no financial impact is expected in the second quarter ”.
Going into details, the impact is between 8 and 9 billion dollars for the gas sector, mainly in Australia, between 4 and 6 billion for the upstream, especially in Brazil and in the shale in North America and between 3 and 7 billion in the refining portfolio of petroleum products.
THE WEIGHT OF PETROLEUM PRODUCTS
And just looking at oil products, in the forecasts of the British giant there are fears that sales of oil products will be limited to a range between 3.5 and 4.5 million barrels per day, a sharp drop from 6.6 of the previous year , in the face of a demand that drops drastically.
THE PRICE PER BARREL
Also the price per barrel does not allow profits to fly: Royal Dutch Shell predicts that the price per barrel, for 2020, should be around 35 euros (for Brent ). Some small bullish light should be seen from 2021, when it will rise to 40 dollars. From 2022 the price per barrel will have to be 50 dollars to reach 60 dollars in the long term (and therefore return to the level of early 2020).
in the second quarter says that sales of petroleum products will be limited to a range between 3.5 and 4.5 million barrels per day, down sharply from 6.6 the previous year precisely because of the "significant drop" in demand following the pandemic.
THE DIFFICULTIES OF BP
Shell's announcement isn't the first of its kind. Just a few days ago, recalls Radiocor , BP announced write-downs of between 13 and 17.5 billion dollars, again due to the economic crisis triggered by the pandemic and the performance of the oil market.
DEVALUATIONS IN VIEW OF UP TO 300 BILLION DOLLARS
Shell and BP will certainly not be alone. According to a report by Deloitte ( details here ), "the difficult conditions of the oil market could push the shale industry to devalue or devalue the value of its assets for a value of about 300 billion dollars with significant reductions expected in the second quarter of 2020 ".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/effetto-covid-su-shell-tutti-i-dettagli/ on Tue, 30 Jun 2020 12:50:43 +0000.