Hit Hard by Coronavirus, Shell Plans Multi-Billion Writedown

Hit Hard by Coronavirus, Shell Plans Multi-Billion WritedownHit Hard by Coronavirus, Shell Plans Multi-Billion Writedown

Royal Dutch Shell said it will write down between $15 billion and $22 billion in the second quarter, as the company gave investors a wider glimpse of just how severely the coronavirus crisis has hit Big Oil.
The impairment is the firm’s largest since Royal Dutch Petroleum Co. and Shell Transport & Trading Co. merged in 2005, and shows how the pandemic has left no part of the energy giant’s sprawling business unscathed, Bloomberg reported.
Shell lost money from pumping oil, fuel sales fell and shipments of everything from liquefied natural gas to petrochemicals suffered.
The lockdown-induced slump has permeated through the entire industry, which is reassessing both the value of its assets and longer-term business models. Shell’s large LNG business, which is central to its vision of the future of energy, is seen taking the biggest hit.
“We see material downside for second-quarter earnings,” Banco Santander SA analyst Jason Kenney said. Despite a possible weaker performance relative to its peers, the Spanish bank still sees potential upside in the stock, as the bad news was largely anticipated.
Despite a recent rebound in consumption in some of the worst-hit countries, resurgent waves of the virus show the recovery remains fragile.

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