Royal Dutch Shell Plc (RDS.B)

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Oil and gas demand likely weakened 'for years,' Shell CEO says

Jul. 16, 2020 5:59 PM ET|About: Royal Dutch Shell plc (RDS.A)|By: Carl Surran, SA News Editor

The global economy will not achieve a V-shaped recovery after the coronavirus epidemic, which will hurt oil and gas demand for years, Royal Dutch Shell (RDS.A, RDS.B) CEO Ben van Beurden says.

"Energy demand, and certainty mobility demand, will be lower even when this crisis is more or less behind us. Will it mean that it will never recover? It is probably too early to say, but it will have a permanent knock for years," the CEO told IHS Markit today in an interview.

The weaker demand outlook and subsequent drop in gas prices mean Shell and others have needed to sharply cut spending sharply and postpone large amounts of investment "for some time to come."

Shell will publish the exact size of its Q2 writedown - flagged last month at as much as $22B - at the end of July, but it will not affect "operational coverage and the coverage of dividends," van Beurden said.