Mixed Q2 news from the world's oil majors

A largely downward Q2 trend offset by a few bright notes as majors reveal their figures. 

BP has reported profit for the second quarter of 2019 of $1.8bn, down from $2.8bn a year earlier. Underlying replacement cost profit is $2.8bn, similar to last year’s. Underlying RC profits for the first half of the year were down from $5.4bn to $5.1bn.  Profits after inventory holdings and taxes were $1.8bn for Q2 and $4.7bn for the half, against $2.9bn and $5.2bn last year. 

BP’s Group Chief Executive Bob Dudley has described the company as being “right on target”. His comments were supported by CFO, Brian Gilvary, who noted that the final acquisition payments to BHP and those relating to the Gulf of Mexico oil spill had been made in the quarter. As a result: "we continue to expect gearing to trend down through 2020 in line with disposal proceeds from our $10 billion programme and ongoing operating cash flow delivery", Gilvary stated. 

A combination of lower realised oil, gas and LNG prices, weaker realised chemicals and refining margins, and higher provisions all affected Shell’s Q2 results. Income attributable to shareholders was down 50% from $6bn in Q2 2018 to $3bn for the same period this year. CCS earnings attributable to shareholders were down 42% from $5.2bn in Q2 2018 to $3.02bn in the same period this year. However, Shell CEO Ben van Beurden remained optimistic: "despite some headwinds in the quarter we achieved results that show the strength of our strategy and our portfolio."  He noted: "This quarter we achieved some key milestones such as the start-up of Appomattox and the first LNG cargo from Prelude. And these add to our competitive portfolio which is expected to generate additional cash in the coming quarters."

ExxonMobil reported estimated second quarter 2019 earnings of $3.1bn compared with $4bn a year earlier, a fall of 21%. However, there has been a 33% increase in earnings between the first and second quarters of this year.  Earnings included a favourable identified item of about $500m reflecting the impact of a tax rate change in Alberta, Canada. Amongst other highlights, the US-based major confirmed: "...a final investment decision on a multi-billion dollar expansion of its integrated manufacturing complex in Singapore to convert fuel oil and other bottom-of-the-barrel crude products into higher-value lube basestocks and distillates. The expansion will add 20,000 barrels per day of ExxonMobil Group II basestocks capacity and increase production of lower-sulfur fuels by 48,000 barrels per day."

Chevron announced positive Q2 2019 results, reporting earnings of $4.3bn for the period, against $3.4bn in the second quarter of 2018. However, the first half results showed a very slight fall from $7bn in 2018 to $6.9bn in 2019. Michael Wirth, Chevron’s chairman and CEO said: “Second quarter earnings and cash flow benefited from record quarterly production volumes and the receipt of the Anadarko merger termination fee, partially offset by the impact of lower oil and gas prices.”

Meanwhile, the second quarter of 2019 has shown a fall in adjusted net income of 19% for Total to $2.9bn. This continued the downturn in Q1 to produce a drop of 12% to $5.6bn over the first half of they year against 2018 figures.  Chairman and CEO Patrick Pouyanné commented: “Markets remain volatile with Brent averaging $69/b in the second quarter, an increase of 9% compared to the previous quarter.”

Lubes and additives specialist Fuchs followed the downward trend, posting a slight decrease in sales revenues of 1% at 1.29m. Earnings (EBIT) was 19% lower at €157m. The company has described the first half of 2019 as disappointing.  “In addition to the weak development due to the lack of an upturn in the automotive markets, which is still influencing the EMEA and Asia-Pacific regions, the North and South America region was also impacted by decreasing sales revenues in the second quarter," a company statement revealed.

Ending on a positive note, Phillips 66 reported second quarter 2019 earnings of $1.4bn compared with $204m in the first quarter of 2019. Excluding special items of $45m in the second quarter, adjusted earnings were $1.4bn, compared with first-quarter adjusted earnings of $187m. “During the quarter we delivered solid financial results and demonstrated our commitment to operating excellence through safe and reliable operations,” said Greg Garland, chairman and CEO of Phillips 66.