The major oil company Shell has announced a significant decrease in annual profit. The company's total net profit for 2020 amounted to $4.8 billion, which is 71% lower than the figure for 2019. These results turned out to be below the expected financial analytics.
The company noted that such a significant drop in profit was a consequence of the crisis caused by the COVID-19 pandemic, which had a severe impact on demand and oil prices. The low level of global demand for oil and products of the oil and gas industry led to a decrease in energy prices and a reduction in the company's revenues.
In light of the deteriorating economic situation, Shell also announced plans to cut dividends for shareholders. Additionally, the company plans to increase investments in the development of renewable energy sources and reduce the extraction of hydrocarbons. These steps are part of the strategy to transition to a more environmentally clean energy.
Such changes in strategy reflect a global trend towards reducing the use of energy sources that are harmful to the environment and encourage the development of environmentally clean technologies.
