Last year, oil and gas company Shell booked its largest ever loss (USD 21.7 billion) as a result of the corona crisis. Large write-offs during the first lockdown already resulted in the largest quarterly loss in the company’s history. Shell was not able to make up for that. In the fourth quarter, the company was once again in the red.

A year earlier, the British-Dutch company still made a profit of USD 15.8 billion.

Oil prices collapsed

Shell suffered greatly from the fact that fewer planes were flying, fewer cars were driving around and the industry was in a lower gear. As a result, there was less demand for oil and gas and oil prices temporarily collapsed. They even became negative in futures trading for the first time in history. Traders had to pay to be able to deliver their oil to someone.

In the course of the year, the oil markets did show signs of recovery, but in many countries new lockdowns were announced later. This depressed fuel sales and the situation also led to lower margins on refinery products, for example. As a result, the company suffered a loss of some USD 4 billion in the fourth quarter, which was significantly worse than what analysts had generally expected.

Job cuts

The corona crisis had already forced Shell to take drastic measures. For the first time since the Second World War, the dividend to shareholders was reduced. In addition, Shell announced global job cuts of 7000 to 9000, roughly one tenth of the total workforce. In the Netherlands, about 900 jobs will disappear.

Also read: Shell to cut up to 9000 jobs in sustainability push

‘2020 was an extraordinary year,’ concludes top executive Ben van Beurden. According to him, Shell took ‘tough but decisive measures’ and, despite everything, managed to close the year with a stronger balance sheet. He also emphasised that Shell is committed to increasing the dividend again. For the first quarter of this year, Van Beurden foresees about four per cent more payout per share.

Source: ANP

Picture by Shell.