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Argus Media: Shell makes record loss in 2020 after more write-offs

Excluding inventory effects, Shell made a loss of $4.48bn in the October-December period, compared with a profit of $871mn a year earlier, reports Argus Media.
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Konstantin Rozhnov of global energy and commodity price reporting agency Argus Media on Thursday (4 February) published a summary on the market forces and decisions Shell had to make throughout the Covid-19 pandemic and energy transition which resulted in the company’s record loss in 2020:

Shell posted a record loss in 2020 after it booked more hefty write-offs in the fourth quarter.

Excluding inventory effects, Shell made a loss of $4.48bn in the October-December period, compared with a profit of $871mn a year earlier. The quarterly loss was largely driven by pre-announced, non-cash post-tax impairment charges of $2.7bn and charges of $1.1bn mainly for “onerous contract provisions”. 

Charges included a $1.3bn impairment in its Upstream division related to a partial impairment of the Appomattox asset in the US Gulf of Mexico, and $1.3bn in its Downstream segment for assets in the Netherlands and in Singapore, and the shutdown of the Convent refinery in the US. The shutdown also led to charges of $661mn for onerous contracts provisions, redundancy and restructuring. 

Shell said its fourth quarter results reflected lower realised prices for oil and LNG, lower production volumes and lower realised refining margins, all compared with the same period a year earlier. This was partly offset by lower operating expenses and higher chemicals margins, it said.

For the whole of 2020, Shell made a loss of $19.92bn, compared with a profit of $15.27bn in 2019. It booked much heftier non-cash impairments in the second quarter.

The company’s oil and gas output fell by 10pc year on year to 3.371mn b/d of oil equivalent (boe/d) in the fourth quarter, which it said was mainly because of more maintenance activity, the effect of hurricanes in the US Gulf, divestments and Opec+ restrictions, and because of lower production in its Dutch NAM gas joint venture with ExxonMobil. Shell sees its production in the 3.3mn-3.55mn boe/d range in the current quarter.

It expects its proven reserves replacement ratio at -53pc for 2020, but at 23pc for the three-year average. It said that it anticipates that proven oil and gas reserves reductions, before taking production into account, will be around 0.7bn boe in 2020, and that production will be around 1.3bn boe.

Shell’s refinery runs dropped by 20pc year on year to 1.94mn b/d in the fourth quarter, and utilisation was 72pc compared with 78pc. It said that this was mainly down to lower demand and economic plant optimisation, as well as the shutdown at Convent. In the current quarter, the company sees utilisation at 73-81pc. 

The company also said that its oil products trading results were “significantly below average” in the fourth quarter, without giving further details.

Shell’s cash capital expenditure (capex) amounted to $18bn last year, compared with $24bn in 2019 and against a target of no more than $20bn.

Its net debt gearing increased to 32.2pc at the end of December from 31.4pc at the end of the third quarter. Shell’s net debt increased to $75.4bn from $73.5bn over the same period, mainly because of lower free cash flow (FCF) generation and by lease additions.

The company kept its dividend unchanged in the reported period, and said that it plans an increase of about 4pc in the current quarter.


Photo credit and source: Argus Media
Published: 5 February, 2021

 

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Alternative Fuels

Singapore-based Golden Island, Qingdao Port team up on alternative bunker fuels

Agreement covers green methanol, green ammonia and bio-LNG, with cooperation spanning fuel production and transportation through to storage, sales and bunkering.
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Golden Island, Qingdao Port team up on green methanol, ammonia and bio-LNG

Singapore bunker supplier Golden Island Pte Ltd on Monday (21 September) said it has signed a strategic framework agreement with Qingdao Port International Co Ltd to collaborate on the supply of alternative marine fuels.

The agreement covers green methanol, green ammonia and bio-LNG, with cooperation spanning fuel production and transportation through to storage, sales and bunkering.

“By combining our MPA-licensed bunkering capabilities with Qingdao Port’s incredible logistics and strategic hub position, we are building something truly robust for the global shipping industry’s low-carbon future,” the company said in a statement. 

Qingdao Port International, which operates five major port areas in China, will bring its logistics network, storage facilities and customs clearance capabilities to the partnership.

Golden Island is licensed by the Maritime and Port Authority of Singapore (MPA) to conduct methanol bunkering and is ISCC EU-certified.

The companies are also engaging with container liners, bulk carriers, oil tankers and cruise ships regarding the adoption of alternative marine fuels.

 

Photo credit: Golden Island Pte Ltd
Published: 22 September, 2026

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Ammonia

HD HHI and HD KSOE secure ABS AiP for ammonia bunkering vessel design

ABS awarded approval in principle for the basic design of a 22,000 CBM bunkering vessel capable of supplying ammonia as marine fuel.
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HD HHI and HD KSOE secure ABS AiP for ammonia bunkering vessel

Classification society ABS on Monday (21 September) said it has awarded HD Hyundai Heavy Industries (HD HHI) and HD Korea Shipbuilding & Offshore Engineering (HD KSOE) approval in principle (AIP) for the basic design of a 22,000 CBM bunkering vessel capable of supplying ammonia as marine fuel.

The approval is the result of a joint development project initiated earlier this year. ABS reviewed the design’s general arrangement, machinery arrangement, ammonia cargo handling system and fuel supply system against applicable class and international requirements.

Gareth Burton, ABS Senior Vice President, Global Engineering, said: “Bunkering infrastructure is a critical step for any marine fuel to scale, and it has to be implemented with safety designed in from the start.

“This AIP reflects the industry’s need for fuel flexibility while advancing the safe bunkering of ammonia. ABS is proud to support HD HHI and HD KSOE as they develop technologies that expand fuel flexibility.”

Ryu Hong-Ryeul, Chief Technical Officer (CTO) of HD HHI, said: “As ammonia rapidly emerges as a viable low-carbon alternative fuel, demand for ammonia bunkering vessels is expected to grow in line with the increasing adoption of ammonia-fuelled ships. 

“This AIP marks a significant milestone toward the commercialisation of ammonia bunkering vessels.”

ABS and the HD Hyundai group have worked together across a range of technologies supporting ammonia as a marine fuel. Recent projects have included AIP for HD KSOE’s ammonia cargo handling and bunkering system and initial review for HD HHI’s machinery arrangement in engine room.

 

Photo credit: ABS
Published: 22 September, 2026

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Alternative Fuels

J-ENG completes land-based testing of hydrogen-fuelled marine engine

Engine will be installed on a 17,500 DWT multipurpose vessel to be built by Onomichi Dockyard for MOL and MOL Drybulk, with onboard demonstration testing scheduled to begin in April 2028.

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Japan Engine Corporation (J-ENG) on Friday (18 September) said it has completed land-based testing of the world’s first hydrogen-fuelled engine for large commercial vessels, the 6UEC35LSGH.

During factory testing, the engine achieved a hydrogen co-firing rate of at least 95%, reducing GHG emissions by more than 95% compared with conventional heavy-fuel-oil engines.

By adopting a high-pressure direct injection system, which injects fuel directly into the cylinder at high pressure, J-ENG said the engine achieves stable hydrogen combustion. 

Safety measures were also implemented, including a robust structure to prevent hydrogen leakage and double-walled piping for hydrogen supply lines. 

“Approval testing was conducted in the presence of ClassNK and was completed successfully,” the company said. 

The engine will be installed on a 17,500 DWT multipurpose vessel to be built by Onomichi Dockyard for Mitsui O.S.K. Lines and MOL Drybulk.

Hydrogen fuel will be supplied to the engine through a marine hydrogen fuel system, consisting of marine hydrogen fuel tanks and a fuel supply system, developed and manufactured by Kawasaki Heavy Industries.

In addition, Nippon Kaiji Kyokai (ClassNK) will conduct safety assessments throughout each stage of the engine’s development and the vessel’s design, construction and operation.

The vessel will then undergo sea trials before onboard demonstration testing begins in April 2028. 

Kawasaki will also develop and manufacture bunkering equipment for supplying liquefied hydrogen to vessels. 

“The demonstration will further evaluate the engine’s durability and performance under actual operating conditions,” J-ENG added.

 

Photo credit: J-ENG
Published: 22 September, 2026

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