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Shell takes big writedown1/31/2024 ![]() Shell also said it intended to set a stricter target to reduce the net carbon footprint of its energy products by 30% by 2030, from 20% currently, and aim for a cut of 65% by 2050, from 50% at present. BP made a similar announcement in February. The Anglo-Dutch company told investors in April that it intended to stop adding greenhouse gases to the atmosphere by 2050. “While neither Shell nor BP will be going anywhere soon, their importance as dividend payers will likely diminish relative to other sectors, and yield-hungry investors need to be prepared for this eventuality.'' “In a world of falling oil demand and a bigger push towards renewables, these energy titans increasingly look like creatures from another era, something which should give investors pause for thought,'' said Chris Beauchamp, chief market analyst at IG. Shell profits drop on shale write-down and Nigerian woes Royal Dutch Shell profits dropped 60pc to 2.4bn (£1.6bn) in the second quarter after drilling of its shale oil assets in North America. Shares in the company dropped 2.5% on the news. On Tuesday, it was trading near $41 a barrel. Shell predicted prices for Brent crude, the international oil benchmark, would be at $50 dollars a barrel in 2022, having earlier predicted a price of $60 a barrel. price of oil went below zero in April for the first time ever. With storage facilities filling up, the U.S. Supply of oil and gas was particularly high when the outbreak began, creating a perfect storm for the industry. There is little need in aviation for fuel, for example, since most planes are grounded. 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 pandemic has hit the wider energy industry hard because it has placed onerous limits on business, travel and public life. 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." Royal Dutch Shell Plc said it will write down between 15 billion and 22 billion in the second quarter, as the company gave investors a wider glimpse of just how severely the coronavirus crisis. 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." Foxconn reported a 56 per cent drop in net profit to NT12. ![]() 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. 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. ![]() 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.
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