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Page added on April 11, 2021

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Shell Is Back, Baby

Shell Is Back, Baby thumbnail

After more than a year of covid-19 lockdowns, there’s—dare I say—a feeling of hope in the air. Yes, things are far from over, but millions of people are getting vaccinated and it’s starting to seem like there’s a light at the end of the tunnel. Well, sorry to ruin things slightly, but oil companies are also starting to recover from the pandemic after it sparked a historic drop in fuel demand and crushed their profit margins.

On Wednesday, Shell analysts said the oil giant expects to turn a profit from oil and gas exploration and production for the first time since the spread of covid-19 began. Last year, Shell did make money from refineries and chemical processing, so it turned an overall profit. But it saw losses in its core business model—pumping fuel—due to covid-19 restrictions.

Shell’s not alone in seeing a turnaround; Exxon is also expected to announce profits, which estimates put in the range of $2.6 billion. Both lost money on extraction in 2020, but they’re back to one again making gains. Oil prices have risen, which means more drilling is likely on the way.

But that doesn’t mean things have been smooth sailing. The February cold snap that knocked nearly all of Texas’ electricity capacity offline and left nearly 200 people dead also affected oil companies. Its analysts said that a downtick in drilling, refining, and chemical processing capacity during the storm will knock about  $200 million off its previous profit projections. Poor babies.

It’s not just the cold snap that hurt Shell’s profit margins. The company, which is the top fuel retailer in the world, expects that from here, its fuel sales will fall or, at the very best, flatline throughout quarter one. Fuel demand, it seems, isn’t exactly bouncing back—its recovery remains pretty slow. For instance, the firm said its refinery utilization rates were down from its expectations. It’s also making less money from gas trading, and expects on this year will be “significantly below average.”

This shouldn’t come as huge surprise to the firm, which in a February statement said that its “oil production peaked in 2019,” and that it now expects its output to decline gradually by 1 or 2% per year. Seems they were prepared for peak oil.

It’s tempting to laugh in Shell’s face about their weak return to fuel production profits, but honestly, they’re still drilling right now, and that’s bad. Every barrel of oil or gas the company extracts from the Earth is a climate problem.

Shell’s profits faring badly isn’t exactly a home run for workers. The company has made it clear that when times are rough for fuel production, its employees will bear the worst brunt. Last September, Shell executives said that as it produces less fuel, it plans to lay off 10% of its workforce. Other oil companies have made similar moves, showing that only a planned transition away from fossil fuels can ensure those laborers are taken care of.

So yes, it doesn’t seem like energy giants will be making a particularly spectacular recovery from their record slump in 2020, because the market simply seems not to favor fossil fuels they way it used to. But that doesn’t mean we should simply let oil companies do all they can to make money in the dying days of oil, it means we need to force them to wind down even faster.


7 Comments on "Shell Is Back, Baby"

  1. Cloggie on Mon, 12th Apr 2021 8:45 am 

    Another European renewable energy milestone has been reached: a 2nd, 1.4 GW subsea power cable, connecting Germany and its supply of intermittent renewable energy and the vast hydro-storage capacity of Norway:

    “NordLink operational”

    Norway = Europe’s battery pack.
    Scotland will be another.

  2. makati1 on Mon, 12th Apr 2021 5:43 pm 

    Dream on Cloggie…

  3. Cloggie on Mon, 12th Apr 2021 10:43 pm 

    You and your America are an evolutionary dead-end, makati. Sitting on your hands, smelling your own farts, and mocking everybody who tries to innovate in response to rising challenges, doesn’t guarantee your survival.

  4. Biden's hairplug on Tue, 13th Apr 2021 3:54 am 

    The run-up to WW3 and death of the old Anglo-Zionist order:

    This just in:

    “Taiwan: ‘Record number’ of China jets enter air zone”

    “RAF jets deployed in Romania against Russia aggression”

    (The real reason for Russia troops deployment is that the US incites Kiev to attempt to take back Donbass. Putin can’t afford Ukrainian Russians to be slaughtered/cleansed)

    “Alex Salmond ‘stoking anti-English feelings with Braveheart video on breaking spines of oppressors'”

    “Violent riots have broken out in Northern Ireland — here’s why”

    (Kiss the old UK goodbye)

    More Chinese anti-Australian drum-beating:

    “Inside the Beijing newspaper fuelling Australia-China conflict”

    the publication went as far as to label Australia as the “gum stuck to the soles of China’s shoes” while accusing it of being part of an “axis of white supremacy” with its allies.

    Yes, the Chinese will ram the US out of East-Asia first, but… from this you can already deduce that if at some point CW2 breaks out, the Chinese will side with Joe Biden and the libtards/BLM, battling with continental Europe (EU+Russia) over spheres of influence in North-America. The English could operate independently of both Europe and China and reestablish authority over Anglo-Canada, the UK lost between 1956 and 1982:

    The Philippines will be fought over between the US and China if hostilities break out. Makati should run for his life, if he has any sense left in him. Oh wait… lol

    “US, Philippines restart Balikatan military drills amid sea dispute with China”

  5. Cloggie on Tue, 13th Apr 2021 5:00 am 

    More money available than renewable energy projects:

    Money is absolutely NOT the limiting factor in getting the 100% renewable energy transition done. The Paris Accords, climate horror stories (true or false or in-between), as well as the EU renewable energy policy are an unprecedented PR-boost for the transition. And then there is peak conventional oil & gas and the fact that the EU hardly has fossil fuel reserves. Money is yearning for investment opportunities and renewable energy is such an opportunity.

    It’s more of a challenge to get the new technology integrated in existing highly regulated society.

  6. Anonymouse on Tue, 13th Apr 2021 7:07 pm 

    Who are you talking to cloggshitter? Or trying to convince. And of what exactly? You have zero qualifications in any relevant fields, despite your (many) dubious claims, and your ability to predict the future, is how shall we put this. Spotty at best. You cant even grasp current events with anything remotely like accuracy. Or honesty even.

    Your one, and only, BFF, delusional davy, is long gone. Probably by his own hand given his mental state.

    You should follow his fine example and disappear into the ether as well. Dont worry, someone might mention you in passing if anyone needed an example of an illiterate fool that mostly talked to himself about matters he has little or no understanding of.

  7. Cloggie on Wed, 21st Apr 2021 4:48 am 

    EU companies are taking over the American renewable energy scene:

    “EU Companies Start Offshore Wind Scene in the US”

    The Europeans are returning to North-America and this time for good. North-American decolonization wasn’t such a good idea after all.

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