The economic crisis triggered by the Covid-19 pandemic is cutting down oil profits. After Total which announced in recent days a loss of 7,2 billion dollars in 2020 (against 11,2 billion profit in 2019) now it is the turn of the Norwegian group Equinor, controlled by the state while on February 18 the beacon will light up on Eni accounts. Equinor accused a loss of $5,5 billion in 2020, against the profit of 1,8 billion in 2019. This is the worst result in the history of the group, which has decided to sell its activities in the US, the source of huge losses for years.
For $900 million, Equinor sold its stake in the Bakken oil field in North Dakota and Montana to Grayson Mill Energy, which was backed by EnCap Investments. Over the past 20 years, Equinor has accumulated more than 200 billion kroner ($23,7 billion) in losses in the US.
Returning to 2020 results, adjusted operating income decreased to $3,9 billion, from $13,5 billion in 2019, on revenue down 29% to $45,8 billion. Like the rest of the oil sector, the group blamed the impact of the oil slump on the Covid crisis and had to book write-downs. Its hydrocarbon production globally remained stable at 2,07 million barrels of oil equivalent per day. 67% owned by the Norwegian state, Equinor limited the impact of the crisis through cost reductions that saved it more than 3,7 billion in 2020. The group also continued to expand into renewable energy, particularly in Great Britain with the confirmation of the largest offshore wind farm in the world and the victory in the largest auction ever launched in the US for offshore wind energy.
Equinor still decided to reduce investments in 2021 and 2022 between 9 and 10 billion dollars, compared to 10 billion initially foreseen this year and 12 billion next year.
If oil suffers the blow of the pandemic to which the structural change linked to the increasingly rapid transition towards renewables is added, steel begins to raise its head again. Thyssenkrupp reported a reduction in its net loss in the first quarter of its fiscal year that allowed it to raise its forecast for the full year.
The German industrial conglomerate reported a net loss of 145 million euros in the quarter ended December 31 compared to a loss of 372 million in the same period a year earlier.
Thyssenkrupp said adjusted operating profit increased to $78 million. Quarterly sales fell to 7,32 billion from 9,67 billion euros, while orders fell to 7,85 billion from 9,66 billion euros.
The prior year figures did, however, include the elevator business and other assets that were divested.
The company has raised its fiscal 2021 targets and expects sales to grow in the high-single-digit percentage, but will remain well below its pre-pandemic level. It also expects adjusted EBIT to be near breakeven against a previously estimated "three-digit loss." "We are seeing signs of recovery and our measures are starting to bear fruit," the group's chief executive said, quoted in a statement.
The group had reported an operating loss of 860 million euros for the 2019/2020 financial year in November, due to the Covid-19 pandemic, which led it to announce the cut of 11.000 jobs worldwide.
The takeover offer of the British steel group Liberty Steel, announced in October, has not yet received a response, while the group analyzes "all options".
