Multinational oil and gas company Royal Dutch Shell has reportedly suffered a net loss of USD 21.7 billion in 2020 as oil demand slumped due to the disruption caused by the COVID-19 pandemic. The news comes after two of its competitors, BP and Exxon, reported similar losses.
The company stated that it foresees significant uncertainty will continue to have a negative impact on demand for oil and gas products. In this context, the company added that certain measures need to be taken to cut production.
Last year in September, Shell declared that it would cut up to 9000 jobs to address the effects of the coronavirus pandemic. In January, it said it was cutting 330 jobs from its operations in the North Sea, confirmed sources.
The oil industry was already having to reconsider its future plans as part of the move away from fossil fuels long before the virus hit, and the pandemic accelerated this transition, cited sources knowledgeable with the matter.
As a result, Shell managed to avoid the largest corporate loss ever in the UK, however, the Anglo-Dutch oil company was just halfway there. The deficit of USD 21.89 billion was comparatively low to USD 41.03 billion loss incurred by Royal Bank of Scotland at the peak of the 2008 banking crisis.
Investors are already turning their focus to next week when the company's long-awaited plans to move towards greener energy sources will be outlined by Chief Executive Ben van Beurden.
Pension funds and other major investors are pressing hard for more to be achieved by Shell. However, the same pension funds rely on the broad dividend stream that flows from the oil sector.
Credible sources cited that the pressure is also being felt by other major oil firms. BP, on Tuesday, announced that it lost USD 18.1 billion in 2020, marking the first annual loss in a decade. Whereas, US giant Exxon Mobil reported annual losses of USD 22.4bn on the same day. There were also major losses announced by two other big US companies, Chevron and ConocoPhillips.
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