Shell says it will take up to $22 billion hit from coronavirus

A shell service station.
A shell service station.
iStock

Anglo-Dutch energy giant Royal Dutch Shell will take a vast second-quarter charge of up to $22 billion due to coronavirus and collapsing oil prices, it announced Tuesday.

The company said in a statement that it will face a charge of between $15 billion and $22 billion in the second quarter, after reviewing chronic fallout from the deadly Covid-19 outbreak that crashed global demand for energy.

"In the second quarter of 2020, Shell has revised its mid and long-term price and refining margin outlook reflecting the expected effects of the Covid-19 pandemic and related macroeconomic as well as energy market demand and supply fundamentals," the London-listed firm said.

"This has resulted in the review of a significant portion of Shell's upstream, integrated gas and refining assets."

The energy major added that the move also reflected a planned reshaping of refining activities as it seeks to move towards becoming carbon neutral by 2050.

Shell's announcement comes after rival BP revealed earlier this month that it was taking a hit of between $13 billion and $17.5 billion in the same period as a result of "sustained" coronavirus fallout that ravaged the world's appetite for oil.

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