Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

BP and Shell set to count their losses

BP and Shell were among the winners on the FTSE 100.
BP and Shell were among the winners on the FTSE 100.

North Sea oil and gas giants BP and Shell will sum up a torrid year for the industry globally in annual results this week.

Analysts expect London-headquartered BP to report pre-tax losses of more than £18 billion after a dire second quarter.

BP is due to deliver full-year results for 2020 on Tuesday, with British-Dutch rival Shell posting its figures on Thursday.

Both companies will be counting the cost of Covid-19, a plunge in oil prices and massive write-offs as they responded to last year’s dramatic events.

The pair are also facing major challenges ahead as the industry tries to pivot away from fossil fuels in a global energy transition.

Stuart Lamont, investment manager in the Aberdeen office of wealth manager Brewin Dolphin, said: “Oil prices have largely stabilised over the past few months and currently sit at around the $50 mark – roughly where they were a year ago.

“The greater level of certainty that comes with this should filter into the results of BP and Royal Dutch Shell, both heavily hit when the crisis began and seeing their share prices tumble as a result.

“That said, both companies’ shares are trading not far off the lows registered in March 2020, when fears over the economic impact of Covid-19 were at their height.”

He added: “A big part of the reason for this is around disruption within the oil and gas sector as companies navigate the energy transition.

‘‘BP and Royal Dutch Shell have made pledges to decarbonise themselves, but with that comes execution risk and considerable growth in their renewable generation capacity over the coming years.

“Inevitably, this will need investment at a time when there is uncertainty regarding the returns achievable from renewables.

“Many watchers of the companies will be waiting to hear more on how they will progress their plans and maintain relevance in a rapidly changing world.”

Oil’s recent rebound means the price of a barrel of crude is down by barely 6% over the past year but BP’s shares are trading 40% below where they were a year ago.

Russ Mould, investment director at stockbroker AJ Bell, said: “This may reflect market scepticism over the sustainability of oil’s recovery, investors’ doubts over whether BP can pull off its pivot towards more sustainable forms of energy or even concerns… that the company is not going far or fast enough with the new, net-zero strategy outlined last year by CEO Bernard Looney.

“Sentiment has not been helped by a dividend cut, heavy losses in the second quarter and break-even result in the third, thanks in part to weak commodity prices and in part to $22 billion (£19bn) of asset impairments and write-downs.”

BP announced yesterday that it had entered the offshore wind market through a new partnership with Norwegian company Equinor.

They will together develop up to 4.4 gigawatts from the Empire and Beacon wind farms off the US east coast and seek other offshore wind opportunities.

Dev Sanyal, executive vice-president of gas and low carbon energy, BP, said: “We see significant opportunities by rapidly growing BP’s offshore wind business, making
a major contribution to our strategic goals and developing assets that will provide long-term, stable returns.”

Recommended for you

More from Energy Voice

Latest Posts