![]() ![]() Shell said it will continue to adapt to ensure the business remains resilient, as the industry seeks to shift its focus away from fossil fuels. The change to the Anglo-Dutch behemoth's outlook comes amid a sweeping review of its operations after chief executive Ben van Beurden in April announced plans to cut greenhouse gas emissions to net zero by 2050. Shell expects fuel sales to have slumped 40pc in the three months to the end of June due to a sharp fall in consumption as a result of global travel restrictions. Mr Parker said: "Within this writedown, Shell is giving us a message about stranded assets, just like BP did a few weeks ago." Britain's FTSE 100 slid on Thursday, weighed down by oil major Shell after it flagged a bigger writedown following its decision to exit Russia, while a jump in shares of gambling firm 888 Holdings. ![]() ![]() Earlier this month, BP announced that it would write down the value of its assets by between $13bn and $17.5bn. The announcement brings Shell's forecasts for the industry in line with a similarly beak outlook from major rival BP. "It’s about fundamental change hitting the entire oil and gas sector." Luke Parker, of consultant Wood Mackenzie, said: "The impairment Shell has announced is about more than an accounting technicality, or an adjustment to near-term price assumptions. Shell does not expect prices to return to $60 a barrel until 2023. April 7 (Reuters) - Britain's FTSE 100 slid on Thursday, weighed down by oil major Shell after it flagged a bigger writedown following its decision to exit Russia, while a jump in shares of. International oil benchmark Brent crude has collapsed by more than a third to under $42 this year, triggered by a worldwide economic shutdown that forced factories to close and kept millions of drivers indoors. Analysts said the bumper blow is a sign that the oil and gas market is changing permanently.Ī Covid-19 collapse in demand has forced prices far below the levels needed for most North Sea firms to turn a profit, and is speeding up a wider push into renewable energy which threatens the existence of previously rock-solid businesses. It raises the spectre of many thousands of job cuts in addition to a voluntary redundancy scheme which launched in May. The energy titan said on Tuesday that it would take an accounting hit of between $15bn and $22bn in its second-quarter results as the pandemic hammers all divisions of the sprawling business. The results were a rare bright spot for Shell shareholders in 2020 after the company reported an $18bn loss for the second quarter of the year, announced it would cut 9,000 roles and slashed the dividend for the first time since the second world war.Shell has written off up to $22bn (£18bn) after warning that the coronavirus oil crash has triggered a long-term price slump - sparking speculation that the sun may be setting on a golden age for fossil fuel firms. Shell revealed a modest return to profit in the third quarter after reporting better than expected financial results, and promised investors a “new era of dividend growth” as it switches its focus from fossil fuels to clean energy alternatives. In total it will spend $20bn this year, after cutting its planned capital expenditure from $25bn in March. Oil prices have spent a large part of the last five years under 60 a barrel and while the collapse of several large US shale names might reduce global supply. The company intends to invest by to $2bn a year on “new energies” such as offshore windfarms, electric vehicles and electric car charging. Shell plans to use its deepwater oil and gas assets as a “cash engine” to generate free cashflow that can be reinvested in renewable energy. The write-down includes Shell’s Appomattox oil and gas project in the Gulf of Mexico, which began production in April last year and plans to pump the equivalent of 175,000 barrels of oil a day at its peak.īorkhataria said the partial impairment on Appomattox was particularly disappointing for Shell because it was one of its largest producing deepwater assets. Biraj Borkhataria, an analyst at RBC Capital, said Shell’s profit warning was “disappointing, particularly in the context of the strong run Shell has had in recent weeks”. ![]()
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