Anglo-Dutch energy major Royal Dutch Shell posted Thursday a colossal net loss of $18.1 billion (15.4 billion euros) for the second quarter, blaming massive asset writedowns on the coronavirus-hit oil market.
The performance, contrasting sharply with profit after tax of $3.0 billion a year earlier, was sparked by a huge $16.8-billion charge on chronic fallout both from COVID-19 and collapsing oil prices, said a AFP report.The vast charge was taken "as a result of revised medium- and long-term price and refining margin outlook assumptions in response to the COVID-19 pandemic and macroeconomic conditions as well as energy market demand and supply fundamentals," Shell said in a results statement.
The quarterly performance meanwhile reflected lower prices for oil, liquefied natural gas (LNG) and gas, while it was also adversely impacted by lower refining margins and oil products sales volumes.
Production dipped six percent to 3.4 million barrels of oil equivalent per day in the reporting period -- and is forecast to drop further in the third quarter.
"Shell has delivered resilient cash flow in a remarkably challenging environment," said Chief Executive Ben van Beurden in Thursday's statement.
"We continue to focus on safe and reliable operations and our decisive cash preservation measures will underpin the strengthening of our balance sheet."
The energy giant had already forecast in June that it would face a charge of between $15 billion and $22 billion in the second quarter, after crude futures had suffered a spectacular crash on COVID-19 fallout, the Saudi-Russia price war and oversupply.Both Shell and British rival BP, which reports its earnings next week, have opted to book charges in the second quarter on sustained coronavirus fallout that ravaged the world's appetite for crude oil.
Shell had already plunged into the red in the first quarter of this year on the back of the oil price crash, which prompted it to cut its shareholder dividend for the first time since the 1940s. The deadly COVID-19 outbreak slammed the brakes on the global economy and savaged oil-intensive industries.
The outbreak also sent oil prices off a cliff from March onwards -- and even caused them briefly to turn negative in April.