Oil major Royal Dutch Shell (RDSB) posted an $18.1 billion loss in the second quarter after feeling the pinch from the slump in sale prices of oil and liquefied  natural gas (LNG).

This included running up impairment charges of $16.8 billion post-tax or $22.3 billion pre-tax, as a result of ‘revised medium- and long-term price and refining margin outlook assumptions in response to the Covid-19 pandemic and macroeconomic conditions as well as energy market demand and supply fundamentals,’ the company gloomily said.

Shares in Shell fell 2.7% to £11.494.

TOUGH HALF

Half year segment earnings were a loss of $6.1 billion, which included a post-tax impairment charge of $8.2 billion, mainly related to the Queensland Curtis LNG and Prelude floating LNG operations in Australia.

The company reported adjusted earnings of $0.6 billion for the second quarter of 2020, reflecting lower realised prices for oil, LNG and gas, lower realised refining margins, oil products sales volumes and higher well write-offs, compared with the second quarter of 2019.

Royal Dutch Shell announced cash flow from operating activities for the second quarter was $2.6 billion, which included negative working capital movements of $4 billion.

OUTPUT DOWN

Compared with the second quarter of 2019, total production decreased by 2%, which the company said was mainly due to more maintenance activities in Australia and lower demand.

In the first half of 2020, total production rose 5% compared with the same period in 2019, mainly due to less maintenance activities, new fields and field ramp-ups, as well as the transfer of the Rashpetco operations in Egypt from the upstream segment.

Cash flow from operating activities for the first half of 2020 was $6.6 billion.

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Issue Date: 30 Jul 2020