Paris—European oil majors have posted strong quarterly profits as a recovery in crude prices fueled their rebound from the coronavirus crisis.
France’s Total, Britain’s BP, Anglo-Dutch group Shell and Spain’s Repsol have this week posted $14.5 billion in first-quarter profits between them.
At the same time, the companies renewed their commitments to investing in renewable energies.
It’s a huge turnaround from last year, when global lockdowns decimated economic activity and oil prices fell off a cliff, taking the energy giants’ balance sheets with them.
Royal Dutch Shell led the way posting a $5.7-billion (4.7 billion euros) net profit in the first quarter on Thursday following a loss in the same period last year.
BP also returned to the black, booking a $4.7-billion profit while Total added $3.3 billion, even outstripping pre-pandemic levels.
Repsol, browbeaten by two years of huge losses, scored a $783-million gain.
The results are a boon for the majors, who made tens of billions of cumulative losses last year as the health pandemic took hold and prices collapsed.
Prices have returned to pre-pandemic since them, exceeding $60 per barrel. Goldman Sachs analyst see prices rising to $80 in the next six months.
“These are profitable price levels and it is not a surprise that oil companies have published strong results,” said Michael Tamvakis, commodity economics professor at London’s Business School.
Oil prices should remain strong as the driving and flying season restarts later in May and June, Tamvakis said.
“So for now, oil companies have weathered the storm,” he said.
The profits are also a reflection that some companies are slimming down their staff levels.
Shell decided to ax more than 10 percent of its global workforce, or up to 9,000 jobs.
Shell, like some of its peers, has also been shedding assets. That gave it a $1.4-billion boost in the first quarter.
“Shell has made a strong start to 2021, generating over $8 billion of cash in the quarter,” said chief executive Ben van Beurden.
He added that Shell’s model is ideally positioned to benefit from recovering demand.
“Fortunately for investors these latest results come without the drama seen this time last year when Shell cut its dividend for the first time since the Second World War,” said Keith Bowman, equity analyst at Interactive Investor.
Shell this time around increased its dividend payout by about 4.0 percent compared with the final quarter of last year.