![]() But the war in Ukraine still hangs over the industry and shares of BP and TotalEnergies - the companies with the largest outstanding exposure to Russia - haven’t performed so well. In anticipation of better times ahead, Shell, Exxon and Chevron have jumped about 30% this year. Instead, governments around the world are suddenly desperate to woo energy producers and secure scarce supplies. No more struggling through low prices, slumping demand and ever-growing criticism over climate change. This puts major oil companies in an enviable position. Prices have eased in recent weeks, but they remain very high as Europe debates the possibility of restricting Russian energy imports. After Russia’s invasion of Ukraine, crude oil briefly surged to almost $140 a barrel in London and European natural gas broke records. That stands in contrast to their Russian peers, such as gas producer Novatek PJSC, which won’t publish first quarter results.įor the oil majors, the first quarter of 2022 largely put to rest the financial strains of the coronavirus pandemic. London-based BP and Shell will post earnings next week. TotalEnergies SE kicks off the reporting season on Thursday, followed the next day by Exxon and Chevron Corp. This should generally offset the negative impact of ceasing operations in Russia.” ![]() “Oil prices look likely to remain elevated in the near-term as supply tightness persists. “The exit from Russia shouldn’t throw the oil industry’s earnings far off track,” said Laura Hoy, an equity analyst at Hargreaves Lansdown. The outlook for the rest of the year is just as strong. An accounting loss doesn’t mean money going out of the door today and the figure that really matters for investors - free cash flow - is on track to hit a 14-year high. ![]() and Shell Plc quitting their Sakhalin oil and gas projects and BP Plc dumping shares in Kremlin-controlled Rosneft PJSC. That would be the highest since 2011, but could be matched by the combined writedowns resulting from Exxon Mobil Corp. The world’s five largest international oil companies are set to post total net income, excluding the one-time hit from exiting Russia, of $34 billion. The outcome will be a first-quarter earnings season full of contradictions - huge operational profits on one side, massive accounting losses on the other. The results were a rare bright spot for Shell shareholders in 2020 after the company reported an $18bn loss for the second quarter of the year, announced it would cut 9,000 roles and slashed the dividend for the first time since the second world war.(Bloomberg) Big Oil is walking away from tens of billions of dollars of Russian assets, but $100 crude is easing the sting.The invasion of Ukraine forced the global supermajors to sever most of their ties with Moscow, while also sending oil and gas prices soaring. Shell revealed a modest return to profit in the third quarter after reporting better than expected financial results, and promised investors a “new era of dividend growth” as it switches its focus from fossil fuels to clean energy alternatives. In total it will spend $20bn this year, after cutting its planned capital expenditure from $25bn in March. The company intends to invest by to $2bn a year on “new energies” such as offshore windfarms, electric vehicles and electric car charging. Shell plans to use its deepwater oil and gas assets as a “cash engine” to generate free cashflow that can be reinvested in renewable energy. The write-down includes Shell’s Appomattox oil and gas project in the Gulf of Mexico, which began production in April last year and plans to pump the equivalent of 175,000 barrels of oil a day at its peak.īorkhataria said the partial impairment on Appomattox was particularly disappointing for Shell because it was one of its largest producing deepwater assets. Biraj Borkhataria, an analyst at RBC Capital, said Shell’s profit warning was “disappointing, particularly in the context of the strong run Shell has had in recent weeks”.
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