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Top energy companies in Europe signalled confidence in a lasting recovery from the pandemic impact

August 02/2021

MOSCOW (MRC) -- Europe's top energy companies signalled confidence in a lasting recovery from the pandemic impact by drawing on higher oil prices to boost shareholder returns and reassure investors as they roll out risky climate strategies, said Hydrocarbonprocessing.

After swiftly cutting spending and jobs in response to the unprecedented collapse in energy demand last year, executives from Royal Dutch Shell, TotalEnergies and Norway's Equinor were eager to highlight the rapid reversal in fortunes. "We wanted to be really clear and signal to the market the confidence that we have in our prospects and our cash flows," Chief Executive Ben van Beurden said on Thursday, after Shell launched a $2 billion buyback programme and boosted its dividend for a second consecutive quarter, a year after cutting it for the first time since the 1940s.

Energy companies have come under heavy pressure from climate campaigners, governments and shareholders to speed up the shift from fossil fuels to cleaner sources. While some investors welcome the change as they perceive carbon-intensive, fossil fuel energy as unsustainable, others are worried about the implications for profit margins of new business models.

Benchmark Brent crude oil prices more than doubled in the second quarter from a year earlier to around USD69 a barrel, driven by recovering demand and tightening global supplies. As profits surged, France's TotalEnergies also announced on Thursday plans to buy back shares. CEO Patrick Pouyanne said however that a large increase in dividends would not be reasonable yet and would be linked to higher cash flow.

The group said it expected to generate more than USD25 billion in cash flow this year, based on current high oil price forecasts, and would invest in more new projects and return surplus amounts to shareholders if oil prices remained high. Equinor also said on Wednesday it would begin a long-planned share buyback that will reach USD300 million by the end of the third quarter after profits surged.

BP reports its second quarter results on Aug. 3. It launched a USD500 million buyback in the previous quarter after halving its dividend last year.

As per MRC, Shell agreed to sell its stake in eastern German refinery PCK Schwedt, the latest in a string of refinery disposals as part of the Anglo-Dutch company's energy transition strategy. Shell said in a statement that it will sell its 37.5% share in the refinery for an undisclosed sum to Vienna-based Alcmene GmbH, part of the Liwathon Group, an integrated logistics and investment business headquartered in Estonia. The deal is expected to close in the second half of 2021, pending approval by cartel authorities and its partners, Russia's Rosneft and Italy's Eni.

As MRC informed earlier, Royal Dutch Shell closed the FCC unit at its Deer Park, TX facility on 18 July due to a fire. It is not known how long this facility will be closed with a capacity of 340,000 barrels per day and 90,000 tonnes of propylene per year.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.


mrcplast.com
Author:Anna Larionova
Tags:Europe, petroleum products, crude oil, PP, PE, neftegaz, petrochemistry, British petroleum, Shell, Total Petrochemicals, COVID-19, Russia.
Category:General News
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