Major oil multinationals including Shell, Chevron and Eni, among others are counting their losses for the second quarter (Q2) 2020.
The second quarter reports obtained by SlyNews indicate that Shell postedlosses of $18.1 billion, Chevron reported an $8.3 billion loss and Eni made a net loss of 714 million euros ($839 million) in the period under review.
Speaking on a conference call, Shell chief executive officer, CEO Ben van Beurden designs to restructure and streamline the firm are now being drawn up, meaning it “will end up, probably, with fewer people”.
Shell, which posted second quarter losses of, $18.1 billion currently employs around 83,000 people worldwide, with “really difficult decisions” already being made such as voluntary severance programmes and freezing bonuses to reduce costs.
It comes as the energy giant seeks to reposition the business post-Covid, with the virus leading to huge write-downs of its oil and gas businesses, as it heads towards net zero.
Beurden said that work will help “improve the situation” but it is “too premature” to give figures in terms of how much Shell will shrink its workforce.
He said: “After the summer we will be going through a zero-based review of our diagonal operating model within the new structures that we are currently deciding on.
“I think that will probably be the time to see what comes out in terms of headcount.”
Meanwhile, BP has already announced plans for 10,000 cuts, most by the year’s end, while ExxonMobil is similarly reducing staff by 10-15 per cent.
However, Chevron Corporation has also reported $8.3 billion loss in the second quarter as the coronavirus “significantly reduced demand.”
Amid a historic drop in oil prices, the company’s average price per barrel of oil and natural gas liquids fell more than 60 per cent year over year.
The oil giant lost $1.59 per share on an adjusted basis, while revenue came in at $13.49 billion. In the same quarter a year ago the company earned $2.27 per share on $36.32 billion in revenue.
Chevron’s CEO, Michael Wirth said: “The past few months have presented unique challenges….The economic impact of the response to COVID-19 significantly reduced demand for our products and lowered commodity prices. Given the uncertainties associated with economic recovery, and ample oil and gas supplies, we made a downward revision to our commodity price outlook.”
The company said that while demand and prices have started to show signs of recovery, they’re not back to pre-pandemic levels. Given the uncertain outlook, Chevon said results could be depressed next quarter, too.
During the second quarter, the company’s average sales price per barrel of oil and natural gas liquids in the U.S. was $19, down from $52 a year earlier. Natural gas prices rose to 81 cents per thousand cubic feet, up from 68 cents a year earlier.
Also, the Italian giant, Eni has reported an adjusted net loss of 714 million euros ($839 million) in this quarter, compared with a profit a year earlier, it said in a statement.
Eni now sees its full-year dividend at 55 euro cents a share, compared with an expectation of 89 euro cents back in February. The decision to cut follows similar moves at Royal Dutch Shell Plc and Equinor ASA.
These poor financial outings by the oil majors has been blamed by the slump in demand for crude and fuels as various governments the worldover imposed lockdowns to contain the virus.
Consumption fell particularly sharply in its home market the first European economy crippled by the pandemic.
“We have gone through what is likely to be one of the most challenging quarters the oil and gas industry has faced in its history,”
Chief Executive Officer, Eni, Claudio Descalzi said: “Emerging from the pandemic will be difficult, with signs of great uncertainty still to come.”
Eni shares fell 3.8% in Milan to trade at 8.09 euros as of 9:25 a.m. local time. The stock has slumped 42% this year.
The company’s quarterly production slid to 1.71 million barrels of oil equivalent a day from 1.83 million a day a year earlier, according to the statement. Eni cut its forecast for the year to 1.71 million to 1.76 million barrels a day from a previous projection of as much as 1.8 million.
