First quarter 2020 oil majors ride a volatile wave

Covid-19 takes its toll on most of downstream oil industry.

The first quarter of 2020 has slashed BP's underlying replacement cost profit from $2.4bn in Q1 last year to $0.8bn this year.  Lower prices and poor demand are reflected in the figures. Replacement cost loss for the first quarter was $0.6bn, compared with a profit of $2.1bn for the same period in 2019.

Posting a massive 100% Q1 drop from 2019 income of $6.1bn, Shell has announced a $24m loss in the first quarter of 2020. The company's Q4 2019 income was $965m, marking an even more significant slide at the end of last year. 

At the Investor Relations meeting, Ben van Beurden, Shell's CEO spoke about taking decisive action to reduce the company's spending, increasing liquidity and effectively positioning the business to manage through the deteriorating macro-economic and commodity price outlook.

Meanwhile Total has reported a 35% fall in net income from $2.76bn in the first quarter of 2019 to $1.78bn in the same period of this year. Chairman and CEO Patrick Pouyanné said, "The Group is facing exceptional circumstances: the Covid-19 health crisis, which is affecting the world economy and creating major uncertainties, and the oil makret crisis, with the sharp drop in oil prices since March."

Unprecedented market challenges are cited as the story behind ExxonMobil's financial figures which show a fall of 126% on earnings, down from $2.35bn in the first quarter of 2019 to $610m loss in the same period this year. To provide some context, Exxon's fourth quarter 2019 earnings were $5.69bn, 111% higher than Q1 2020.

Another oil major feeling the effects of the COVID crisis is Phillips 66 with a first-quarter 2020 loss of $2.5bn, compared with earnings of $736m in the fourth quarter of 2019. Excluding special items of $2.9bn in Q1 of this year, adjusted earnings were $450m against Q4 2019 adjusted earnings of $689m.

Greg Garland, Chairman and CEO of Phillips 66 stated that “Phillips 66 employees have stepped up to the unprecedented challenges of the current environment to maintain safe operations, ensure business continuity and execute our strategy. Our top priorities are protecting the health and safety of our employees, supporting their families and our communities, and ensuring the financial and operating strength of the company. We remain focused on providing the critical energy products and services that are essential to the global economy.”

Fuchs generated sales revenues of €616m in the first quarter of 2020, which is moderately below the previous year's level of €643m. Growth in North and South America continued due to acquisitions, but could not offset the decline in sales revenues in the Asia-Pacific region due to the impact of the COVID-19-pandemic in China.

Also bucking the trend, Chevron has reported earnings of $3.6bn for the first quarter 2020, compared with earnings of $2.6bn for the same period last year. “First quarter earnings were up from a year ago,” said Michael K. Wirth, Chevron’s Chairman of the board and CEO “driven by downstream margins and increased Permian production. However, commodity prices fell significantly in March and the weakness continued into the second quarter, primarily due to reduced demand resulting from the COVID-19 pandemic.”