Shell’s declaration of loss threatens 14 projects in Nigeria

The recent declaration of loss by Netherlands-based global oil and gas giant, Royal Dutch Shell, for first quarter 2020 might stand in the way of the timely completion of its 14 projects in Nigeria.

Royal Dutch Shell recorded a net loss of $24 million in Q1 2020 relative to the $6 billion after-tax profit it reported in the corresponding period of 2019 and slashed its dividend for the first time since 1945.

The firm’s projects currently under construction in the country include Gbaran Nodal Compression, Gbaran Phase 3, EA Further Development, Assan North and Soku Nadal Compression Phase 2.

Shell said it was yet to firm up decisions on HA Development, JK-A Oil Phase I, Uzu Development, Bonga South West, Bonga North Tranche I, HI Development, HD Phase I, Epu Phase 2 and Bonga Main Life Extension and Upgrade.

Shell, which cut its spending last month in the aftermath of the oil crash, said it reduced dividend by 65% to 16 cents per share relative to the 47 cents it declared for Q4 2019.

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“As a result of COVID-19, there is significant uncertainty in the expected macroeconomic conditions with an expected negative impact on demand for oil, gas and related products,” the firm stated.

It noted that global developments and instability in oil supply had triggered uncertainty in commodity markets, adding that the pandemic would make the second quarter difficult with no price rebound in view.

Similarly, U.S. biggest oil company, Exxon Mobil Friday reported its first quarterly loss in thirty years, posting $610 million loss in Q1 2020 after a write-down of nearly $3 billion due to collapse in U.S. oil prices.

Exxon Mobil had recorded a profit of $2.4 billion in the corresponding period of 2019.

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