Q3 2015 another bad one for the oil majors

Shell reports significant loss amid poor results for oil majors.

Shell has announced a dramatic fall in the Third Quarter of 2015 with a loss of $6.1bn compared to a gain of £5.3bn for the same quarter last year.  Third quarter CCS earnings were $7.9bn including identified items.  The company says that earnings were impacted by non-cash charges including currency exchange rates, while upstream operations were badly affected by lower oil and gas prices.

BP showed short-term improvements, but still down on the previous year.  Underlying replacement cost profits of $1.8bn for the quarter, were slightly up on the $1.3bn for the previous quarter, but lower than the year-on-year $3.0bn reported in Q3 of 2014.  Close to completion of its current divestment programme, the company has so far shed $7.8bn in assets, reporting a $5.2bn operating cash flow for this quarter.

French major Total's adjusted net income fell $2.8bn for the Quarter, a drop of 23% year-on-year. CEO Patrick Pouyanné reported this within "a context where the oil price has fallen by 50% in one year". Comparative sales fell some 33% and, while refining and chemical operations were up 82% year-on-year, upstream income was 60% off.

ConocoPhillips fared little better, reporting a net loss of $1.1bn in this year's Q3, compared with earnings of $2.7bn for the same period last year.  Adjusted earnings showed a net loss of $466m, compared with a positive third-quarter 2014 of $1.6bn. Again, largely blaming oil prices for the poor results, the company is accelerating the reduction of capital and operating costs in response to the increasingly long-term low price climate.

ExxonMobil also failed to escape the bumpy ride, reporting a significant drop in earnings - down 47% from $8.1bn in Q3 2014 to $4.2bn in the same quarter this year. As with many of its rivals, the company reported positive downstream chemical earnings offset by lower upstream realizations.

Chevron also reported a severe downturn in earnings - $2.0bn for this quarter, compared with $5.6bn in the same quarter last year. Sales and other operating revenues in the third quarter 2015 were $33bn, compared to $52bn in the same period last year.  Chevron's CEO John Watson claimed the company is focused on "changing outcomes within our control", reflecting the oil industry's challenge of low oil prices.

With its focus on downstream activities, Phillips 66 was able to buck the trend with an increase in third-quarter earnings, reporting $1.57bn, against $1.18bn last year. Adjusted earnings were $1.64bn, some $0.5bn up year-on-year. “Our best quarterly earnings this year were driven by stronger results from Refining and Marketing. Higher refining capacity utilization and product margins increased financial results for these businesses,” said Greg Garland, Chairman and CEO.