Page 9 - EurOil Week 18 2021

EurOil PERFORMANCE EurOil

Oil and gas are still
significant contributors
to the super-majors’
results, even though
they plan to shift their
focus to cleaner energy
over the coming years.

Shell, BP beat first-quarter expectations

GLOBAL SUPER-MAJORS Royal Dutch Shell and according to Refinitiv. This also marked an
BP both beat analyst expectations with their improvement on $115mn in the fourth quarter
first-quarter results, which were announced of 2020, and $791mn a year ago.
last week. The result was bolstered by stronger BP’s net debt was also reported to have fallen
oil prices and growing demand as various coun- by $5.6bn to $33.3bn at the end of the first quar-
tries cautiously re-open amid efforts to bring ter, with the super-major exceeding its target of
the coronavirus (COVID-19) pandemic under reducing net debt to $35bn. The company said it
control. would now retire this goal, subject to maintain-
Shell reported adjusted earnings of $3.2bn ing a “strong investment-grade credit rating” as
for January-March 2021, while analysts had it moves forward.
expected $3.1bn, according to Refinitiv. The “It shows that it is possible to do two things
super-major reported a particular strong perfor- at once,” BP’s CEO, Bernard Looney, said of his
mance from its upstream segment, with adjusted company’s results. “It is possible to deliver our
earnings of $963mn, compared with a loss of shareholders with competitive cash returns and
$748mn in the fourth quarter of 2020. This was at the same time transition the company to a
attributed to “higher prices, higher demand and lower-carbon future.”
lower depreciation”. This comes as BP has made much of its target
Additionally, Shell said it had repaid $4bn of net-zero greenhouse gas (GHG) emissions In a bid to
worth of debt, as it works to reduce its debt to by 2050. A growing number of oil companies –
$65bn from $71.3bn following the first-quar- including Shell – have adopted similar targets, reassure
ter repayments. Asset sales in Nigeria, Canada but are still working out the details of how to
and Egypt added $1.4bn to the super-major’s reach them. investors about
first-quarter profits. In BP’s case, the company has already said
“By focusing our upstream portfolio on its that it is planning to increase the proportion its trajectory,
core, we are simplifying our operating model of its investment that goes into non-oil and gas Shell raised
and generating more cash from our barrels while businesses over time. However, oil and gas con-
remaining strongly positioned to gain from sus- tinues to constitute an important part of BP’s its dividend by
tained upside in commodity prices,” Shell’s chief business for now, with its first-quarter results
financial officer, Jessica Uhl, said on the compa- making mention of notable achievements such around 4%.
ny’s earnings call. as the Puma West discovery in the US Gulf of
In a bid to reassure investors about its tra- Mexico, as well as the arrival of the Argos plat-
jectory, Shell raised its dividend by around 4%, form in the region for its Mad Dog 2 project.
marking the second increase in six months. This However, BP also flagged up low-carbon pro-
comes after the super-major had slashed its div- jects, such as being selected as a preferred bidder
idend for the first time since World War II in for UK offshore wind leases along with EnBW.
April 2020, by around two thirds. BP also completed the formation of its US off-
BP, for its part, reported that its first-quarter shore wind partnership with Norway’s Equinor
underlying replacement cost profit – used as a during the quarter, and announced plans to
proxy for net profit – had come in at $2.6bn, con- develop the UK’s largest blue hydrogen produc-
siderably above analyst expectations of $1.4bn tion facility.™

Week 18 06•May•2021 www. NEWSBASE .com P9