Pandemic woes continue for oil majors for Q2

Q2 figures for oil majors demonstrate the full impact of the COVID pandemic as profits plummet.

"Difficult conditions" is the term used in BP's second quarter results in which the company has reported loss for Q2 2020 of $16.8bn, compared with a profit of $1.8bn for the same period a year earlier, including a net post-tax charge of $10.9bn for non-operating items. Non-cash Upstream exploration write-offs of $6.5bn after tax also impacted the company as well as lower oil and gas prices and very weak refining margins, reduced oil and gas production and demand for fuels and lubricants.

Facing even greater financial challenges, Shell has reported a 302% half year fall in its income attributable to shareholders from 2019 to 2020, down to a loss of $18.1bn including an impairment charge of $16.8bn post-tax ($22.3bn pre-tax) which results from a "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."

Citing global oversupply and COVID-related demand impacts, ExxonMobil has reported a Q2 2020 loss of $1.1bn down from earnings of $3.13bn in the same period in 2019.  First half earnings are down from $5.48bn in Q2 2019 to a loss of $1.69bn in Q2 2020.

“The global pandemic and oversupply conditions significantly impacted our second quarter financial results with lower prices, margins, and sales volumes. We responded decisively by reducing near-termspending and continuing work to improve efficiency by leveraging recentreorganizations,” said Darren W.Woods, Chairman and CEO.

French-based Total has described the second quarter environment as "exceptionally weak", reporting its adjusted net income down a dramatic 96% from the same period last year to $0.13bn. The first half of 2020 fell 67% from the same period last year to $1.91bn.

Also facing pandemic woes is Chevron  with a reported loss of $8.3bn for second quarter 2020, compared with earnings of $4.3bn in the same period of 2019. Sales and other operating revenues in second quarter 2020 were $16bn, compared to $36bn in the previous year.

Michael K. Wirth, Chairman of the Board and CEO said, “The past few months have presented unique challenges.  The economic impact of the response to COVID-19 significantly reduced demand for our products and lowered commodity prices. Given the uncertainties associated with economic recovery, and ample oil and gas supplies, we made a downward revision to our commodity price outlook which resulted in asset impairments and other charges.”

One slightly brighter star in the petrochemical galaxy, Fuchs, has reported a reduction of just 14% in half year sales revenues down from €1.29m to €1.12m. Half year earnings before interest and tax (EBIT) are down 29% from €157m to €112m. Fuchs says that it has benefited from its global presence, stating that "When the crisis began in China in February and continued there in March, the EMEA and North and South America regions were not yet affected or were only slightly affected at the end of the first quarter. By contrast, when the wave fully hit the western world in April and May, a clear upward trend was already emerging in Asia, which then continued with a strong June."

Also following the downwards trend, Phillips 66 has reported a a second-quarter loss of $141m for Q2 2020. This compares with a loss of $2.5bn in the first quarter of 2020.  Greg Garland, Chairman and CEO said, "Phillips 66 employees are demonstrating steadfast commitment to our values as we deliver essential energy products to our customers. Our top priority remains the health and safety of our employees, their families and communities."