Shell plunged into a gigantic loss in the second quarter of 2020 after reducing the value of its oil and gas fields by a record $ 17 billion.
The Anglo-Dutch oil giant recorded a loss of $ 18.4 billion (£ 14.2 billion) based on the current cost of supplies, the measure the company uses to gauge performance – down from to a profit of $ 3 billion for the same period last year.
It is likely to raise fears of massive job cuts in an attempt to stabilize the ship, following in the footsteps of its rival BP which is cutting 10,000 jobs.
Shares fell more than 6% to £ 11.52. The stock was trading above £ 20 in early February before the crisis hit.
Bosses were forced to write off $ 16.8 billion from company assets after crude oil crashed following unprecedented collapse in demand as lockdowns brought the global economy to a halt .
However, excluding one-off charges, the company posted a small net profit – ahead of what analysts expected.
Shell said the depreciation was triggered by lower medium and long-term price forecasts.
The international benchmark for Brent crude oil is down to $ 43 a barrel, down 37% year-to-date, while the US mid-price price measure in West Texas is briefly turned negative in April for the first time because traders nearly ran out of space to store. unused stock.
By eliminating the effects of the depreciation, Shell reported a profit of $ 638 million for the second quarter, down 82% from the same period last year, but far better than analysts’ average estimate of ‘a loss of $ 664 million.