Shell and Total report big drop in profits, but made clean-energy investments.


Royal Dutch Shell and Total, two of Europe’s largest oil companies, reported sharply lower quarterly profits on Thursday, after widespread lockdowns designed to tackle the pandemic slammed demand for oil and gas.

Despite the difficult conditions, the companies are still investing in their operations, by shifting into wind and solar and other clean-energy businesses in response to pressures from investors and European governments to lower greenhouse gas emissions. Total, for instance, has almost doubled its capacity to generate electricity via renewable means over the last year.

The trading of crude oil and products saved Shell from a loss on the metric called adjusted earnings that is most widely followed by analysts. Shell, based in The Hague, earned $638 million, an 82 percent fall from a year earlier. It took advantage of the volatile market conditions to earn $1.5 billion in trading, almost 30 times what it made a year earlier.

Total, based in Paris, was also squeezed by market conditions and reported adjusted net income of just $126 million, a 96 percent fall from a year earlier.

With both the pandemic and climate change concerns raising questions about future earnings, companies are reviewing assets like oil fields and refineries to see if their values need to be marked down. This exercise led Shell to take a $16.8 billion writedown and report an $18.1 billion net loss. Total is taking $8 billion in writedowns, mostly on Canadian tar sands properties whose reserves may wind up “stranded” or never produced.



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