BAKU, Azerbaijan, March 12
By Leman Zeynalova – Trend:
Royal Dutch Shell expects coronavirus to impact its financial condition in 2020, Trend reports citing the company.
“Since the start of 2020 there has been a developing outbreak of the COVID-19 (coronavirus). To date, we have not seen a material impact on our operations. As a result of COVID-19, we have seen macro-economic uncertainty with regards to prices and demand for oil, gas and products. Furthermore, recent global developments and uncertainty in oil supply in March have caused further volatility in commodity markets. The scale and duration of these developments remain uncertain but could impact our earnings, cash flow and financial condition,” said the company.
Shell expects is cash capital expenditure to be at the lower end of the $24 billion to $29 billion range in 2020.
“Following the successful delivery of our $30 billion divestment program during 2016-18, divestments are expected to amount to more than $10 billion over the 2019-2020 period,” said the company.
Moreover, Shell said it launched $25 billion share buyback program in 2018, and has completed about $15 billion of buybacks as of February 20, 2020. “Our intention to complete the $25 billion share buyback program remains unchanged, but the pace remains subject to macro conditions and further debt reduction.”
The company said that the prices of crude oil, natural gas, oil products and chemicals are affected by supply and demand, both globally and regionally.
“Furthermore, macroeconomic risks can affect demand for our products. Government actions may also affect the prices of crude oil, natural gas, oil products and chemicals. This could happen, for example, by promoting the sale of lower-carbon electric vehicles or even through the future prohibition of sales of new diesel or gasoline vehicles, such as the prohibition in the United Kingdom (UK) beginning in 2035. Prices for oil and gas can also move independently of each other. Factors that influence supply and demand include operational issues, natural disasters, weather, pandemics, such as the COVID-19 (coronavirus) outbreak, political instability, conflicts, economic conditions and actions by major oil and gas producing countries.”
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